TODAY'S PAPER
Overcast 57° Good Morning
Overcast 57° Good Morning
ClassifiedsReal Estate

$100M expansion to state loan program to fight foreclosures

A vacant, foreclosed home is seen in Central

A vacant, foreclosed home is seen in Central Islip on Dec. 4, 2015. Photo Credit: Veronique Louis

The state plans a $100 million expansion of a program to provide interest-free loans of up to $40,000 to homeowners facing foreclosure.

Attorney General Eric T. Schneiderman was to announce the expansion at a news conference in Westchester Wednesday morning.

The Mortgage Assistance Program began in late 2014, and to date 131 of the 654 loans statewide have gone to Long Islanders, totaling $4.1 million, more than for any region except New York City, Schneiderman said in a statement Wednesday. Statewide, $18 million in loans have been made.

The average loan on Long Island was $31,000, Schneiderman’s office said.

The loans come due only when a home is sold, its mortgage is refinanced or reaches maturity, the borrower dies, or the ownership is transferred.

Although no interest will be charged, the amount due will be adjusted to account for inflation. Loan recipients must earn less than 120 percent of their area’s median income.

Long Island was hit by a wave of foreclosures during and after the recession, as many workers lost jobs and the prices of homes, which had ballooned before the recession, collapsed. Many recent buyers owed more than their homes were worth, making it difficult to sell if they could no longer make their mortgage payments.

For all Island homes with outstanding mortgages, 4.67 percent were in foreclosure in February, down 0.64 percentage points from a year earlier, said California-based real estate analytics company CoreLogic. That was the lowest rate here since 2010, though it was higher than the national and state rates.

The share of Island homes in foreclosure reached its post-recession high of 7.09 percent in August 2012, CoreLogic figures show.

“We know how hard Long Island was hit by the foreclosure crisis,” Schneiderman said in announcing the program two years ago.

The expansion of the Mortgage Assistance Program is being funded by Schneiderman’s $5 billion settlement in April with Goldman Sachs over what he termed the bank’s deceptive practices leading up to the financial crisis. It is expected to help more than 3,000 additional families across the state pay off small debts that are preventing them from securing a needed mortgage modification.

Even families with reliable income streams are often denied mortgage modifications because they have a series of missed mortgage payments, delinquent second or third mortgage liens, or unpaid property tax bills that must be satisfied before a first mortgage holder will grant a modification, Schneiderman said.

Homeowners seeking loans can call 855-HOME-456 or visit https:// agscamhelp.com.

More news