NEW YORK (Legal Newsline) - New York Attorney General Eric. Schneiderman announced on Thursday that his office will fund $1 million worth of foreclosure prevention services to help New York residents struggling through the foreclosure crisis.
An average of one in 10 mortgages is at risk of foreclosure in the state of New York. The number of individuals living in a home at risk of foreclosure or in foreclosure approximately exceeds the populations of Syracuse, Rochester and Buffalo combined.
"As our state faces another tight budget year, we must be creative and aggressive in our efforts to support working families who are struggling to stay in their homes," Schneiderman said.
"This funding will provide thousands of New Yorkers with the legal expertise they desperately need to defend their rights and avoid falling prey to unscrupulous mortgage servicers or foreclosure mill law firms filing fabricated or robosigned documents. My office will continue to use every tool available to us to protect homeowners and all vulnerable New Yorkers."
According to Schneiderman, foreclosure prevention through legal assistance is a taxpayer bargain. A report by the Empire Justice Center projects that if foreclosures of properties that are currently distressed continued unimpeded, they will cost local governments in the state of New York more than $5 billion. For every foreclosure averted, however, through legal or other assistance measures, counties could save an average of $186,965 in direct and indirect costs, Schneiderman says.
On the final day of 2011, the last round of federal stimulus funding for the New York State Homes and Community Renewal's Foreclosure Prevention Services Program ran out. The state has not yet fully made up for the shortfall. Schneiderman's funding will allow several important services to continue throughout the state that would otherwise have ceased.
The allocation of $1 million will be funded by dollars unspent after a 2006 settlement between Schneiderman's office and Ameriquest Mortgage Co. The company allegedly engaged in predatory and illegal lending practices to refinance and sell mortgages, including inflating appraisals to qualify borrowers for loans, charging excessive loan origination fees, and misrepresenting and failing to disclose loan terms. Under the terms of the settlement, Ameriquest paid $295 million to the participating states in restitution, $22 million of which went to the state of New York and its homeowners.
Schneiderman has directed an expedited RFA process, which might lead to awards for funding in as little as eight weeks.