"New York has consumer protection safeguards in place that are among the strongest in the nation, designed to provide distressed homeowners with the ability to contest wrongful foreclosures and negotiate fair loan modifications," the New York Mortgage Coalition said in a statement. "According to the Joint Economic Committee of Congress the cost of the average foreclosure in the US is $77,935 - compared to $3,300 to prevent a foreclosure. To penalize New York for focusing on foreclosure prevention rather than foreclosure itself and for putting a priority on home retention over home eviction, seems misguided, unfair, and inconsistent with the mission of Fannie Mae and Freddie Mac. Further, the interests of US taxpayers are best served when total social costs are reduced."
Advocacy groups also cautioned the implementation of the program in states affected by hurricane Sandy. "Since the publication of the proposed rule, communities in Connecticut, New Jersey and New York have suffered historic damage due to Hurricane Sandy," Americans for Financial Reform wrote. "Borrowers who lost or suffered significant damage to their homes are experiencing extreme financial hardships and need to be able to borrow at the lowest market rates available. This proposal would further impede restoration efforts."
--Written by Shanthi Bharatwaj in New York
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