Mark Winston Griffith

Look for City and State Anti-Foreclosure Actions in 2008

As the foreclosure crisis continues to ravage the country, America's cities and states are having mixed results in the fight to stem foreclosures and guard against predatory lending practices.

Take the example of New York State, where Governor Spitzer's "State of the State" address called attention to some of his proposed anti-foreclosure policies: "We...must continue our shared efforts to make sure New Yorkers don’t fall victim to the subprime lending crisis...[W]e can continue to press banks to agree to mass modification of loans. And we can assure that our court system is not being used to treat homeowners unfairly...I will send you a bill that amends state foreclosure law to provide additional protections for homeowners. In addition, working with Attorney General Cuomo, I will submit legislation that enhances our anti-fraud laws, to ensure that those who engage in mortgage scams are punished."

New Yorkers for Responsible Lending praised Spitzer's commitments and urged him to work to enact the Responsible Lending Act (A. 8972) which, among other things, would establish an ability to pay standard and eliminate many abusive lending practices and products. NYRL commended the "Governor for his proposal that lenders issue a 60-day pre-foreclosure notice, and afford borrowers the opportunity to negotiate with lenders before a foreclosure action may be filed. NYRL also commends the Governor’s commitment to press banks to modify unaffordable loans."

In contrast, earlier this week, the New York Daily News editorial pages took a swipe at the Spitzer administration's Keep the Dream program, the State of New York Mortgage Agency's $100 million revolving loan fund designed to help homeowners refinance their mortgages at lower costs. The News took the Keep the Dream program to task for its unreasonable eligibility requirements and anemic marketing efforts which have resulted in only four applicants, and only two modified loans closings, over the past four months.

But if you're looking for aggressive efforts to tame subprime lenders, the New York Times ran a piece on Tuesday that highlighted municipal efforts to "make lenders responsible" for abusive lending practices. In particular, the Times reported on a law suit filed by Baltimore mayor Sheila Dixon (who is featured on DMI's Mayor TV) and the City Council against Wells Fargo for discriminating against black borrowers in Baltimore. Compare this to New York City where just a few years Mayor Bloomberg, with the help of the State Supreme Court, was successful in shooting down anti-predatory lending measures passed by the NYC City Council.

Mark Winston Griffith: Author Bio | Other Posts
Posted at 12:38 AM, Jan 11, 2008 in Economic Opportunity | Mortgage Crisis
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