2012-02-03 / Top Stories

Schneiderman Secures Foreclosure Funding

Attorney General Eric T. Schneiderman has announced his office will fund $1 million in foreclosure prevention services to aid New Yorkers struggling through the foreclosure crisis. The Attorney General today issued a Request for Applications (RFA) seeking bids from non-profit legal services and legal aid organizations to provide direct legal services to homeowners in foreclosure or at imminent risk of foreclosure.

“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,” said Schneiderman. “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.”

Statewide, an average of 1 in 10 mortgages is at risk of foreclosure. The approximate number of individuals living in homes that are either in foreclosure or at risk of foreclosure (based on typical household size for each distressed mortgage) exceeds the populations of Buffalo, Rochester and Syracuse combined.

While foreclosures come at a high cost for families and communities, preventing foreclosures through legal assistance is a bargain for taxpayers. The Empire Justice Center projects that if foreclosures of currently distressed properties continue unabated, they will cost local governments in New York State more than $5 billion. However, for every foreclosure averted, through legal assistance or other measures, counties would save an average of $186,695 in direct and indirect costs.

Schneiderman has made it a top priority of his administration to hold accountable those whose misconduct led to the collapse of the housing market – and to provide significant relief to homeowners.

The last round of federal stimulus funding for the New York State Homes and Community Renewal’s Foreclosure Prevention Services Program ran out on December 31, 2011, and the state has not fully made up the shortfall. The Attorney General’s funding will allow critical services that would otherwise be lost to continue across the state.

The $1 million allocation will be funded by unspent dollars from a 2006 settlement between the Attorney General’s Office and Ameriquest Mortgage, Co. The investigation found that Ameriquest engaged in predatory and illegal lending practices to sell and refinance mortgages, including misrepresenting and failing to disclose loan terms, charging excessive loan origination fees, and inflating appraisals to qualify borrowers for loans. The settlement required Ameriquest to pay the participating states $295 million in restitution, roughly $22 million of which went to New York and its homeowners.

Given the urgency of the foreclosure crisis, Schneiderman has directed an expedited RFA process, which could result in awards for funding in as soon as eight weeks.

Good government groups, housing or- ganizations, community leaders, and clergy members from across the state today praised Schneiderman’s decisive action.

“We are incredibly grateful to the Attorney General for supporting the Foreclosure Prevention Services Program,” said Mark Ladov, Counsel for the Brennan Center’s Democracy Program. “This program has a strong track record of improving outcomes for working families at risk of losing their homes, and is a critical investment in New York State’s economic recovery. Attorney General Schneiderman’s intervention helps ensure that this vital work will continue. We look forward to working with the Attorney General to aid struggling families and address New York’s foreclosure crisis.”

“Homeowners across this state are struggling in these tough economic times. We owe a debt of gratitude for Attorney General Schneiderman’s bold action that will give the working families in our community a fighting chance,” said Darius G. Pridgen, Senior Pastor of the True Bethel Baptist Church and member of the Buffalo Common Council.

“By allocating resources for foreclosure prevention services, the Attorney General has once again stood up for those who need our help the most.”

The guidelines for applying and the application will be posted in the New York State Contract Reporter, www.nyscr.org and will also be available on the Attorney General’s website,www.ag.ny.gov/bureaus/budget_ fiscal/procurement.html.

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