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TASK FORCE TARGETS ABUSIVE LENDING PRACTICES

Governor Eliot Spitzer today announced he established an interagency task force to combat predatory lending practices.

“Lending practices that prey upon the public cannot and will not be tolerated,” Governor Spitzer said. “This task force will take a comprehensive look at the sub-prime lending industry, and recommend steps to protect borrowers, particularly minorities and the elderly.”

The task force to Halt Abusive Lending Transactions (HALT) will:

• Analyze foreclosure and lending data to identify borrowers and communities most at risk;
• Develop loan and refinance programs to help homeowners whose current loans are inappropriate for their financial circumstances;
• Create statewide outreach and educational campaigns to assist the state’s most vulnerable borrowers;
• Propose legislative and regulatory changes to expand consumer protections;
• Identify lenders, industry participants and others who benefit from steering minorities, recent immigrants, senior citizens, members of low income communities or military families into inappropriate loan products; and
• Pursue enforcement actions against those engaging in wrongful conduct and, where appropriate, coordinate these actions with other federal, state and local law enforcement agencies.

The task force is chaired by Banking Superintendent Richard H. Neiman and consists of agency heads from the Department of State, the State of New York Mortgage Agency (SONYMA), the Division of Human Rights, the Consumer Protection Board, the Division of Housing and Community Renewal, the Governor’s Office of Regulatory Reform, and members of the Governor’s Executive Chamber.

The task force is looking to directly solicit input from community and advocacy groups and industry representatives as it designs initiatives to combat predatory lending and mortgage fraud.

One of the ways in which the task force has begun gathering data and reaching out directly to communities is through a series of regional summits - day-long symposiums that bring together regulators, law enforcement, local community and advocacy groups, and industry representatives to discuss the problems facing a particular region. The first summit was held in New York City on April 11, 2007. The next summit is tentatively scheduled for this summer in Buffalo.

“These summits are an important tool for understanding the problems facing borrowers in foreclosure and for identifying ways we can assist future borrowers,” said Superintendent Neiman. “By taking this grassroots approach to understanding the regional challenges facing New Yorkers, we learn first hand how our current laws and regulations impact borrowers and whether any legislative or regulatory changes are needed. This consumer feedback is crucial, and helps us to design constructive solutions that will have a positive effect on our communities.”

“The flip side of our mission to assist people in purchasing their first home is to help them keep their home, and to make sure their housing costs are affordable,” said Priscilla Almodovar, President and CEO, New York Housing Finance Agency and SONYMA. “Any refinancing program we would announce would include education. By doing so, borrowers get the information they need to be successful and responsible homeowners.”

Task force members are also taking further steps to address these problems. The Division of Human Rights is actively investigating whether certain schemes and practices are violating the state’s civil rights law, and SONYMA has begun offering a 40-year fixed rate loan for first-time homebuyers. SONYMA also is seeking to develop a refinancing program that would serve certain low- to moderate-income borrowers.