NY Throwing Homeowners a Line - of Communication

Saturday, December 5th, 2009

Even “the best laid plans of mice and men gang aft agley.” You’re probably already quite aware of the recent foreclosure run in the US, but what may surprise many consumers is the trouble has now spread beyond sub-prime loans. In the third quarter, 1 in 10 home owners were late making their payments nationwide. That is quite a number to swallow.

Fortunately, New York is fighting alongside consumers in the battle to keep their homes. Recent New York legislation, taking effect January 2010 will extend aid to all home owners facing foreclosure instead of just sub-prime borrowers. Now if only they could get that stigma out of home owners’ minds about arbitration and mediation.

New York Leading Battle to Keep Homes Out of Foreclosure

More than one fourth of the consumers who go through New York’s mediation program for homeowners facing foreclosure get to keep their homes. Unfortunately, more than one third don’t even attend the meetings.

For all of New York’s good intentions, nobody is taking them up on the offer. Of course, that isn’t for a lack of want or need. Rather, home owners are afraid. They see the letter from the New York court system and don’t even open it - they know their home will soon enter foreclosure, but they don’t know the court is actually looking to help the consumer keep their home.

Most show up with their keys in hand, ready to give up the house, until a secretary explains what is going on. Almost everyone shows up in tears, sure their home is gone for good. What they don’t realize is they have been given the second chance provided by New York state law.

Lenders are required to provide 90-days notice prior to foreclosure and go through a mediation process with the borrower. For now this law only applies to sub-prime borrowers, but in the beginning of next year all borrowers facing foreclosure can have the same benefits.

Nevertheless, the court system is still fighting the consumer stigma which plagues their efforts. They have revised the invitation letter five times in an attempt to help home owners understand what they are doing, and have considered using a different mailing address to encourage home owners to at least open the letter. For now, all we can do is spread the word and hope home owners realize they have just been handed an opportunity of a lifetime.

Tags: foreclosure, mediation, ny
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