As neighborhoods in Queens, Brooklyn and upstate New York face an ongoing barrage of foreclosures, two state legislators have proposed a bill that they hope would stem the tide of unraveling mortgages.
Foreclosure Moratorium Bill Gains Traction in Both Houses
The bill calls for a year-long moratorium on foreclosures throughout New York. During the proposed 12-month respite, homeowners would be required to make court-ordered minimum monthly payments while renegotiating the terms with the lender.
Though the bill, authored by State Sen. Frank Padavan (R-Queens) and Assembly Member James Brennan (D-Brooklyn), has enjoyed bipartisan support in the Legislature, banking industry leaders say the measure will simply prolong the housing crisis by postponing the unavoidable.
Padavan said his bill, which has 24 co-sponsors in the Senate, could curb the spiral of foreclosures that have hurt property values, destroyed credit ratings and forced many out of their homes.
“It’s not a bail-out or an abdication of the homeowner,” said Padavan. “This helps the homeowner keep his home off the market, which helps the economy, and at the same time the bank would get a return on the mortgage with interest, rather than being forced to become a real estate broker.”
Both Padavan and Brennan have seen their districts hit particularly hard by housing problems stemming from the sub-prime mortgage crisis.