Schneiderman announces program to help homeowners avoid foreclosure

New York state mortgage assistance program will provide loans to families struggling to avoid foreclosure; program will bridge struggling homeowners to affordable mortgage modifications

Attorney General Eric T. Schneiderman has announced the launch of the New York state mortgage assistance program, or NYS MAP, which will provide small loans to families struggling to avoid foreclosure. The loans will assist families in securing mortgage modifications and result in more families staying in their homes.

The program is an enhancement to the attorney general's homeowner protection program, which provides struggling borrowers with free legal and housing counseling services, and has served more than 28,000 homeowners across the state since the launch of the program in October of 2012.

Borrowers can apply beginning Oct. 15.

"For many families across New York state, receiving a small loan through this program will mean the difference between a mortgage modification and the loss of a home," Schneiderman said. "It's hard to imagine a better investment in communities and families still feeling the effects of the housing crisis. We know that our homeowner protection program has had real results, helping thousands of families keep their homes. I'm pleased to announce that the mortgage assistance program will go even further, providing a lifeline to families still in need."

In the course of its work mitigating the damaging effects of the housing crisis in New York state, Schneiderman's office discovered many families are being denied mortgage modifications as a result of small outstanding debts. Even families with reliable income streams are denied modifications due to things like a series of missed mortgage payments, delinquent second or third mortgage liens, or unpaid property tax bills, which need to be satisfied before a first mortgage holder will grant a modification. By filling the gap for families, the NYS MAP program will empower consumers to negotiate with their mortgage holders and ultimately remain in their homes.

Eligible loan uses will include, but not be limited to, paying off arrears, including mortgage payments or unpaid interests and fees; paying down second or third mortgages; satisfying property tax liens or other liens that might lead to loss of homeownership; and supplying borrowers with a "matching" fund to achieve principal reduction or other beneficial first lien modification terms.

Consumers will be eligible to apply for loans of varying amounts not to exceed $40,000 per borrower; the attorney general anticipates the program will have the capacity to disburse several hundred NYS MAP loans over the next 18 months. In all cases, a NYS MAP loan will result in homeownership retention at the time the loan is made. 

To access NYS MAP, homeowners will work with an existing HOPP counselor or legal aid provider to complete the application. The attorney general's office launched the website www.nysmap.org where prospective applicants can find out about the program and get connected to a HOPP lawyer or counselor. Consumers can also contact the New York attorney general consumer hotline at 855-HOME-456. 

The program is modeled after a New York City-funded pilot program administered through the Center for New York City Neighborhoods. The attorney general program is working with CNYCN, as well as the Empire Justice Center, to assist in the operations of NYS MAP. Both agencies are contracted by the office of the attorney general to assist with the administration of the HOPP program.

Ms. Veneta Burton is one example of how the NYS MAP program expects to change lives. Burton lives with her daughter and three grandchildren in the Bronx. After getting diagnosed with breast cancer, Burton fell behind on both her mortgage and her condo association payments. Soon after, she received a foreclose notice. Fortunately, Burton found her way to Legal Services, Bronx NYC, a HOPP grantee, who connected her with the MAP pilot program. With her $22,000 loan, she was able to pay down her mortgage and her condo association arrears, which also brought down her housing expenses by $300 per month. "We would have lost our home to foreclosure without this program," Burton said.

Across upstate and Western New York, the distressed mortgage problem is concentrated in certain communities, with the highest rates in Troy (9 percent), Rochester (7 percent) and certain neighborhoods in Buffalo, such as Kensington (10 percent). Overall, Erie County has the fifth-highest distressed mortgage rate in New York.