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New York Homeowners May Be at Risk of Losing Foreclosure Help

Last year, the foreclosure rate in New York State surged and today thousands of residents are at risk of losing their homes. It was recently announced that state-funded resources that provide foreclosure assistance will not receive funding as of October 2017 and will stop accepting clients as of this spring. Currently, there are no plans to replace the funds allocated to foreclosure assistance. Some warn that the lack of foreclosure resources for New York residents can have devastating effects, leading to homelessness and homeowners falling victim to scams.


Newsday reported that in 2016, there were nearly 33,000 new foreclosure filings across New York State. According to Legal Services NYC, New York City saw more than 7,500 foreclosure filings and more than 50,000 pre-foreclosure notices were sent to city residents during the year. New York City neighborhoods that have been hit hard by foreclosure are southeast Queens (including Jamaica, Ozone Park, and Saint Albans) and eastern Brooklyn (including East New York, Canarsie, and East Flatbush). Parts of the Bronx (including Highbridge, Crotona, and Fordham) have the highest foreclosure rates in the city, according to the Center for New York City Neighborhoods. More than 8,000 foreclosures occurred on Long Island, a number higher than that in 2007, when the financial collapse occurred, according to Empire Justice Center.


Currently, there are 32 state-funded entities that provide help to homeowners who need loan modifications or other forms of foreclosure assistance. However, New York residents may be in jeopardy of losing this support network. Since 2012, the New York State Attorney General’s office has committed $100 million to help New York residents avoid foreclosure on their homes. The initial funding came from the Attorney General’s settlement with the big banks over deceptive practices that led to the financial crisis. However, that settlement money now goes directly to the state’s coffers instead of the Attorney General’s office.


As of October 1, 2017, the entities that provide this help to homeowners in need will no longer receive funding. In Governor Andrew Cuomo’s initial 2018 budget, he has not included any money to replenish these foreclosure service funds.  Advocates are pushing for state officials to provide the $10 million for the remainder of fiscal year 2017 and an additional $20 million for 2018.


In anticipation of the lack of funding, state-funded entities will stop taking new clients this spring because the casework is so labor-intensive and it takes a long time to resolve. With the lack of foreclosure assistance resources, nonprofit entities will be unable to help New York homeowners save their homes using loan modifications and settlements. As a result, more people are likely to lose their homes to foreclosure and New York neighborhoods will be negatively impacted by the economic domino effect. New York homeowners may also be at greater risk of falling victim to scams. Oftentimes, these organizations can detect when a homeowner has been a victim of a scam and provide assistance.


At Hobson-Williams, P.C., we understand that facing foreclosure can be a difficult and overwhelming experience for homeowners and their families. Our foreclosure defense lawyers can negotiate with mortgage companies on your behalf to help save you time, money, and, ultimately, your home. If you are facing foreclosure on your home, call our New York foreclosure defense law firm at 1-866-825-1529.