NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced on Tuesday that his office has awarded $3 million in foreclosure prevention services to New Yorkers suffering from foreclosure or at imminent risk of foreclosure.
In January, Schneiderman issued a request for applications seeking bids from legal aid organizations and non-profit legal services to provide direct legal services to homeowners struggling through the foreclosure crisis. Schneiderman's office awarded 31 organizations with grants throughout the state.
The announcement arrives weeks after Schneiderman designated $15 million of the $132 million secured from the national mortgage servicing settlement to be used to extend funding for foreclosure prevention and related services. As much as $9 million of the allocation will support the Foreclosure Prevention Services Program, which was set to expire on April 1. The other $6 million from the settlement will support community and housing renewal activities through not-for-profit community-based housing organizations.
"As our state faces tight budget times, we must be creative and aggressive in our efforts to support working families who are struggling to stay in their homes," Schneiderman said.
"Funding legal services is essential to bringing relief for the homeowners and communities that have been devastated by the crash of the housing market, and these grants will provide thousands of New Yorkers with the legal expertise they desperately need to defend their rights in court. As we continue to investigate the mortgage crisis that has impacted communities in every corner of this state, this effort will ensure that justice and accountability prevail at every step of the way."
A $2 million portion of Tuesday's allocation will be funded by an agreement with Brian Kumiega, Steven J. Baum, Pillar Processing LLC and Steven J. Baum PC as part of a settlement related to alleged abuses in their legal work related to foreclosure.
A $1 million portion of the allocation will be funded by unspent money from a settlement between Schneiderman's office and Ameriquest Mortgage Co. Ameriquest allegedly engaged in illegal and predatory lending practices to refinance and sell mortgages, such as charging excessive loan origination fees, inflating appraisals to qualify borrowers for loans and misrepresenting and failing to disclose loan terms.
An average of one in 10 mortgages in the state is at risk of foreclosure, which works out to more people living in homes in or at risk of foreclosure than the amount of people living in Syracuse, Rochester and Buffalo combined.
New York's foreclosure prevention law gives homeowners the opportunity to have a settlement conference in court within 60 days after a foreclosure action has been filed with the court. Organizations that provide foreclosure prevention legal services have given homeowners important support when negotiating loan modifications or other positive resolutions from lenders at conferences for foreclosure settlement. If the agencies did not have funding from the state, many of them would lose the resources needed to fulfill major obligations to homeowners.