Dec
01

Manhattan Co-op and Condo Owners Get More Time to Negotiate With Banks Before Foreclosure

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Mortgage rates include co-ops

There was an article in the  NY Times on Saturday (excerpted below) regarding new legislation to be signed into law which would  help  New Yorkers who were about to default on their mortgages. What is particularly interesting is that for the first time co-ops owners would be  assisted as well.

I was curious to see the extent of pending foreclosures in Manhattan and searched Property Shark for the number of Manhattan apartment lis pendens for October and November 2009. There were 60 and 72 lis pendens respectively for condo apartments in Manhattan and none for co-ops in October and November.

The following was excerpted from the 11/27/2009 New York Times article written by Bob Tedeschi

Last year, a new law was put into place in New York to help protect subprime  mortgage borrowers from foreclosure. Now the state is on the verge of extending similar protections to prime borrowers, too.

A bill passed by the State Legislature this month would require, among other things, that lenders give all borrowers 90 days’ warning before starting foreclosure proceedings and that they take part in settlement conferences with borrowers before proceeding with a foreclosure action. The bill also covers co-op owners.

  • Of the nearly 20 measures in the legislation, mandatory mediation could provide the most relief for struggling borrowers, some of whom have been unable to get their lenders to consider loan modifications. The foreclosure mediation, free for homeowners, would require lenders to provide a representative at a certain date and place. Lenders may be subject to sanctions if they fail to come with financial documents and other information required by mediators.
  • Under the new legislation, when lenders notify the state of an impending foreclosure action, the state must send the borrower’s name to housing counseling agencies, which can then inform the borrower about foreclosure avoidance strategies like the mediation program.
  • The legislation also includes protections for tenants of multifamily housing units that go into foreclosure.

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