Steps to Take When You Can’t Pay Your Mortgage

Dear Friend,

For most, your home is your primary asset. Keeping it provides stability for your family, the neighborhood and community where you live. If you are struggling to keep your home, New York State has programs in place to help you prevent foreclosure.

This information will help protect you and your home during the subprime crisis New Yorkers are facing.

If you have any additional questions, please call my office and I will do all I can to help you.

Sincerely,
signature
Bill Magnarelli
Member of Assembly

333 East Washington Street, Room 840
Syracuse, NY 13202
315-428-9651

Room 519 LOB
Albany, NY 12248
518-455-4826

magnarelliw@assembly.state.ny.us

Good news! New York State passed a law to deliver relief
to homeowners caught in the subprime lending crisis

The law helps current homeowners by:

Providing a 90-day pre-foreclosure notice to alert
borrowers that they are in default or foreclosure
Establishing Mandatory Settlement Conferences to
bring a borrower together with the party initiating
the foreclosure proceeding
Prohibiting unscrupulous “rescue scams” that prey upon homeowners’ fears of losing their homes in foreclosure, including taking power of attorney from a homeowner

The law also establishes protections for future homeowners by:

Enacting a subprime mortgage lending statute requiring lenders to consider borrowers’ ability to repay the loan
Cracking down on lender scams and setting standards for home loans that require brokers to act in the best interests of borrowers
Requiring registration of all businesses servicing mortgage loans
Establishing the crime of residential mortgage fraud
Setting standards and limitations for home loans
Providing $25 million for legal representation and mediation for lending victims

If you fall behind on your payments or are in danger of falling behind, contact your lender immediately. The lender may consider the following remedies:

A new repayment plan and let you pay the past due amount over time
Forgiving some of your debt and refinancing the rest
A “short sale,” letting you sell your house for less than the outstanding loan amount, then taking the proceeds and forgiving the remaining debt
Accepting a hard money loan to bring your mortgage up to date and allow you enough time to sell it. You should know that these loans may have high rates and fees

Home Equity Theft Scams

Always call your lender if you are having problems paying your mortgage. Say NO to deed scams:

Offers to pay your mortgage in exchange for temporarily holding the deed to your home while you live in the house as a renter until you can afford the mortgage payments again
Offers to put the deed in another person’s name who has better credit than you, while the scammer allegedly finds you more affordable financing
Offers to give you a low-cost loan to pay some or all of your mortgage, while you pay back the scammer, who holds the deed to your house as collateral

Keep the Dream
mortgage refinancing program

The State of New York Mortgage Agency (SONYMA) designed this program to help eligible New York households with certain high-risk mortgages avoid possible foreclosure. The program provides struggling homeowners with affordable monthly payments for the full term of the mortgage – eliminating the threat of losing their homes. For more information, visit www.nyhomes.org or call 1-800-382-HOME.

Help with your mortgage payment

For advice on steps to take if you fall behind or are in danger of falling behind on your mortgage payments:

New York State Banking Department Consumer Help Line:

1-877-BANK-NYS (1-877-226-5697)
www.banking.state.ny.us/hetp.htm

The Web site lists certified housing counselors.

The New York State Bar Association’s Lawyer Referral Program at 1-800-342-3661 can help.

For assistance in locating free legal or counseling services in your area, call the Banking Department’s Consumer Help Line or visit the Law Help Web site at www.lawhelp.org/ny/.

Never sign any paper, contract or agreement without fully understanding it.