N.Y. AG praises passage of foreclosure relief bills

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman has commended the New York State Assembly for passing two pieces of legislation that would protect New York homeowners from foreclosure.

The Certificate of Merit bill would enact common sense reforms to bring improved integrity to the foreclosure process and facilitate the participation of homeowners in mediation sessions to negotiate workable alternatives to foreclosure. The Foreclosure Fraud Prevention Act would impose criminal penalties on residential mortgage servicers, lenders and their agents who engage in deceptive or fraudulent conduct related to foreclosure documents.

"By passing these two critical pieces of legislation, the assembly has taken a strong stand on the side of hard working New York families who are fighting to keep their homes but can't get a fair shake from mortgage providers," Schneiderman said. "The 'Certificate of Merit' bill will help keep countless homeowners from getting trapped in the growing 'shadow docket' of essentially frozen foreclosure cases that prevents them from getting a mandatory court settlement conference that could help them keep their homes. The Foreclosure Fraud Prevention Act will serve as a powerful deterrent for any lender or servicer who thinks it can fraudulently cut corners when it comes to foreclosure. I look forward to these two bills becoming law in the state of New York."

Homeowners in New York have been plagued by delayed foreclosure cases, which are referred to as the shadow docket. The Certificate of Merit bill could help up to 25,000 families trapped in the legal foreclosure limbo. The Foreclosure Fraud Prevention Act would impose misdemeanor and felony-level penalties for fraudulent activities such as robo-signing.

Schneiderman proposed the Foreclosure Fraud Prevention Act and jointly proposed the Certificate of Merit bill with the Office of Court Administration. Schneiderman's office is making protecting struggling homeowners a top priority.

In June, Schneiderman announced a three-year, $60 million initiative called the Homeowner Protection Program which gives families facing foreclosure the much-needed access to qualified professional housing and legal advocates.