NY Governor Gives Second Chance to Underwater Borrowers
On December 10, National Mortgage News published an article titled N.Y. Governor Opts to Give Second Chance to Underwater Borrowers.
N.Y. Governor Opts to Give Second Chance to Underwater Borrowers
The New York Department of Financial Services is working on new legislation that would authorize and encourage “shared appreciation” mortgage modifications throughout the state.
DFS regulations would give a second chance to homeowners who may have been previously turned down for relief assistance.
Under the proposed shared appreciation modification, banks and mortgage servicers reduce the amount of principal outstanding on a borrower’s mortgage in exchange for a share of the future increase in the value of the home, DFS says.
“We will continue to explore new options to reach as many homeowners as possible and deliver relief to struggling families facing foreclosure,” says Benjamin Lawsky, superintendent of financial services, who along with Gov. Andrew Cuomo sees principal reduction as a win-win solution for homeowners “trapped in underwater mortgages” at much greater risk of losing their homes, the surrounding neighborhoods impacted by blight and investors.
Cuomo’s new regulations encourage banks and mortgage servicers to offer shared appreciation mortgage modifications to underwater homeowners facing foreclosure including those who are not eligible for existing federal and private foreclosure prevention programs.
Banks and mortgage servicers “must provide clear and prominent disclosures” to borrowers about the terms of the modification. Investors’ share of the appreciation will be limited to the lesser amount of the reduction in principal, plus interest or 50% of the amount of appreciation in market value.
Please click here to view the online article.
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.