Paterson, Senate Near Deal on Foreclosures
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Over vehement opposition from the banking and mortgage lending industries, Governor Paterson and legislative leaders are moving closer to an agreement on legislation that will make foreclosing on homes more difficult for lenders.
While rebuffing a push by Assembly Democrats to impose a one-year delay on foreclosures, Senate Republicans are considering a scaled-back version of a program bill that was submitted by the Paterson administration and passed by the Assembly.
Among the more significant elements of the bill, the governor’s legislative package would protect borrowers by requiring lenders to send notices to homeowners at least 60 days before starting foreclosure proceedings, effectively prolonging a process in New York that is already longer than in most other states.
Mr. Paterson’s bill, which was initially conceived by his predecessor, Eliot Spitzer, would also create a duty of care for mortgage brokers, who would be responsible for ensuring that their customers are able to repay loans.
The legislation is expected to be one of the few significant measures passed by the Legislature before it adjourns for the year on Monday.
In negotiating with the governor’s office, Senate Republicans have political concerns to balance. An important supporter of the conference, the banking industry is lobbying aggressively against the legislation, which it says would threaten mortgage-backed securities and ultimately make borrowing more expensive.
At the same time, Republicans, who are battling to protect their slim majority, are concerned about protecting more vulnerable members who represent areas with higher rates of foreclosure, such as Brooklyn, Queens, and Suffolk County.
A Republican senator of Queens, Frank Padavan, who is expected to face a tight general election contest in the fall, sponsored a Senate version of the Assembly’s one-year moratorium bill. Taking advantage of the Republican bind, Democrats and liberal activist groups are targeting Mr. Padavan, blaming him for not moving his bill through the Senate.
Organizers involved with the state affiliate of a grassroots group, Association of Community Organizations for Reform Now, are staging what they are promising will be a rowdy protest in front of the senator’s district office today.
