A.G. Schneiderman Announces Up To $15 Million Of National Mortgage Settlement To Extend Funding For Foreclosure Prevention And Other Related Services

A.G.'s Commitment Will Continue Funding For Legal Services And Housing Counseling For Six Months

Current Funding Was To Expire On April 1

Schneiderman: Settlement Fight Was To Ensure A Fair Deal For New York Homeowners, Funding Is First Step To Deliver On That Promise

 

NEW YORK – Attorney General Eric T. Schneiderman today announced that up to $15 million of the $132 million he secured in the national mortgage servicing settlement will be used to extend funding for foreclosure prevention and other related services. Up to $9 million of the allocation will be used to support the state’s Foreclosure Prevention Services Program, which was set to expire on April 1. And up to $6 million will support housing and community renewal activities statewide through not-for-profit community-based housing organizations.

“We have an obligation to provide assistance to the struggling homeowners across the state facing foreclosure, and this portion of the national mortgage settlement will ensure that families in New York State have the legal services they deserve to fight wrongful foreclosures and protect themselves in court,” said Attorney General Schneiderman. “Funding for legal services is an essential first step in bringing relief to the homeowners and communities that have been devastated by the crash of the housing market. As we continue to investigate the mortgage crisis that has impacted communities in every corner of this state, we must ensure that justice and accountability prevail at every step of the way. I’d like to thank the Assembly, Senate and Governor for working with our office to make this happen. ”

Legal services funded through the Foreclosure Prevention Services Program have become an integral part of our state’s foreclosure process. New York’s comprehensive foreclosure prevention law entitles homeowners to a 90 day pre-foreclosure notice before a lender can begin a foreclosure action. This notice is required to include a list of at least five nonprofit housing counseling agencies that can assist homeowners at risk of foreclosure. Organizations funded by the Foreclosure Prevention Services Program have also made possible the courts’ successes in negotiating loan modifications from lenders at foreclosure settlement conferences. Without funding for the Foreclosure Prevention Services Program, most of these agencies would lose the resources necessary to fulfill these critical obligations to homeowners.

Today’s announcement comes weeks after Attorney General Schneiderman announced his office will fund an additional $3 million in foreclosure prevention services to aid New Yorkers struggling through the mortgage crisis from proceeds secured from two separate settlements.

Meghan Faux, Director of the Foreclosure Prevention Project at South Brooklyn Legal Services, said, "This funding is truly a lifesaver. Without Attorney General Schneiderman’s intervention, funding for foreclosure prevention services would have expired and homeowners in need of assistance would have been abruptly cut off. Now, countless families across New York will have access to the legal services and housing counseling they need to save their homes and stabilize their community."

Anne Erickson, President and CEO of the Empire Justice Center, a statewide legal services organization working to combat foreclosures in New York State, said, “New York’s Attorney General worked tirelessly to ensure that the funding secured through this national settlement is used in the true spirit for which it is intended – to help fight the epidemic of foreclosures across the country and to do so by funding on-the-ground services for homeowners at risk of losing their homes. Because of Attorney General Schneiderman, New York’s most vulnerable homeowners will not lose access to vital and effective services that provide the last line of defense against avoidable—and often wrongful—foreclosures. This is a major victory for struggling homeowners facing foreclosure in every corner of New York State, and we deeply appreciate the Attorney General’s strong leadership on this critical matter.”

Christie Peale, Executive Director, Center for NYC Neighborhoods, said, “This is great news. Thanks to Attorney General Schneiderman’s leadership, critical foreclosure prevention programs will not have to close their doors to New Yorkers in need. The loss of these services, coupled with gaps in regional funding, would have been devastating to struggling homeowners and communities throughout New York State. On behalf of the CNYCN Network of foreclosure prevention providers and the homeowners we all serve, we are grateful to AG Schneiderman for the lifeline that this funding provides.”

Durrant McKie, homeowner from Southeast Queens, said, “As a homeowner who was facing foreclosure, I can say firsthand that we would not have survived if it weren’t for the help of the Foreclosure Prevention Services Program. Our housing counselor ensured that we did not lose our home and that our rights were protected throughout this difficult process. I applaud Attorney General Schneiderman for making sure other families can fight back, and get the help they deserve.” 

In February, Attorney General Schneiderman announced a settlement of over $130 million for New York with the nation’s five largest mortgage servicers over foreclosure abuses, the fourth highest dollar amount nationwide as part of the federal-state settlement. In addition to penalties for past abuses, the settlement includes direct relief to victims of wrongful foreclosure conduct, loan modifications including principal reductions for struggling homeowners, and funds that can be used to support foreclosure legal assistance and housing counseling programs. The settlement, which imposes strong national standards for mortgage servicing, also fulfilled Attorney General Schneiderman’s demand that he retain the right to bring legal action over misconduct that has not yet been investigated.

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