New York Governor Plans Help For Foreclosure Victims

In an attempt to parry foreclosure fallout the Governor of New York State, Spitzer said in a press conference last Thursday that he wants the lenders to join hands with the federal government to give a second thought to mortgage-backed securities fund so that the wavering market can get back on its rails. The scheme of a fund of $80 billion is to be akin to a similar pool suggested by Citigroup Inc and some other bands to bail out SIV’s (structured investment vehicles) of billions of dollars of risky mortgage securities. Those who would participate in this fund would be able to negotiate for new mortgage terms. But the drive must come from the private sector together with the federal government. If the owners write down or rewrite the terms of these loans by getting together this fund the entire market will be stabilized for the benefit of all concerned.

Under the direction of USA Treasury the mortgage lenders have already grouped together to step up counseling for the borrowers and increase the number of loans that are being modified. HOPE NOW is a nationwide organization that has been set up to stretch out to troubled foreclosure victims before things get so bad that foreclosures become inevitable.
New York Attorney General Cuomo teamed up with Spitzer to step up action against the rising tide of foreclosure that is affecting all sections of the society and economy. They are seeking grants to fund the counseling programmes struggling to put some teeth into the help schemes.
As a first measure New York Mortgage Agency has introduced a $100 million Keep-the- Dream programme that would make it easy for borrowers to refinance and get out of the high cost sub-prime mortgages. Other states too are likewise working on similar lines with the help of Federal Housing Administration to stem the foreclosure tide.

In a letter Spitzer and Cuomo were appreciative of federal action but did not fail to mention ‘serious concerns’ about legislation elimination protections existing at state levels. It would be a grave mistake that federal regulations could replace state law instead of supplementing it. Cuomo’s department is continuing with its scrutiny of $10 trillion US house mortgage industry. He has plans to take legal action against mortgage giants like Fannie Mae and Freddie Mac for mortgage loans they had purchased from banks like Washington Mutual Inc