New York Courts to Offer Foreclosure Assistance
By: Gerri L. Elder
According to a report by the Associated Press, foreclosures in the U.S. were up 48 percent as compared to one year earlier. While the government and mortgage industry say that they are doing everything they can, it is clear that there is more work to be done to help Americans keep their homes.
Although drastic and aggressive action is necessary to slow or stop the wave of mortgage foreclosures across the country, Fox News recently reported that the White House has threatened to veto a massive bipartisan foreclosure bill. Officials say that they oppose the inclusion of $4 billion in the measure to help states buy and rehabilitate foreclosed properties, and a plan to have government-sponsored mortgage giants Fannie Mae and Freddie Mac pay for the rescue.
At the center of the bill is a foreclosure rescue program that would allow the Federal Housing Administration to provide $300 billion in new, cheaper mortgages for homeowners who are facing foreclosure and would otherwise be considered too financially risky to qualify for government-insured, fixed-rate mortgages. The borrowers would be eligible for the program if their mortgage holders would agree to take a substantial loss and allow them to refinance the mortgage loans. This bill would help thousands of homeowners avoid foreclosure and would also benefit the banks that hold the mortgages since they would be able to avoid costly foreclosure proceedings and have the opportunity to recoup some of what they are owed.
So while the country waits for help from lawmakers and the mortgage industry, homeowners in New York who are facing foreclosure may benefit from a new program that has been recently announced by the state's chief judge, according to a report by the New York Times.
The New York foreclosure program would create a new section of the court system to help borrowers and lenders expedite foreclosure settlements. Distressed homeowners would be quickly notified when they face a foreclosure proceeding and would be provided with a list of legal and foreclosure counselors to contact for assistance. They would also be invited to court for a settlement conference.
The court would encourage, but not require, the settlement conference and lenders would still be able to move forward with foreclosure.
Judith S. Kaye, the chief judge in New York, tells the Times that she would hope that having the court system involved early on in the foreclosure process would allow them to serve homeowners more effectively, rather than simply being the force that orders evictions after the foreclosure process.
The pilot version of the foreclosure assistance program is slated to begin in Queens this summer. Queens is one of the areas in New York that has been hardest hit by the foreclosure crisis with a 223 percent increase of foreclosures since January 2005. Statewide foreclosures have increased by 150 percent since that time. Kaye says that an additional 40 percent increase is expected by the end of the year.
If successful, experts say that this program could provide significant help for distressed homeowners. United States Senator Charles E. Schumer said that more than half of the people who face foreclosure could save their homes if they received adequate professional counseling in time.
More information on how filing bankruptcy stops foreclosure.