S T A T E O F N E W Y O R K
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4880
2011-2012 Regular Sessions
I N A S S E M B L Y
February 8, 2011
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Introduced by M. of A. TOWNS, N. RIVERA, ROBINSON, ORTIZ, GIBSON --
Multi-Sponsored by -- M. of A. BRENNAN -- read once and referred to
the Committee on Housing
AN ACT to amend the private housing finance law, in relation to estab-
lishing the urban homeowners assistance program; and making an appro-
priation therefor
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The private housing finance law is amended by adding a new
article 16-B to read as follows:
ARTICLE XVI-B
URBAN HOMEOWNERSHIP ASSISTANCE PROGRAM
SECTION 930. DECLARATION OF LEGISLATIVE FINDINGS.
931. DEFINITIONS.
932. CONTRACTS WITH NEIGHBORHOOD PRESERVATION COMPANIES.
933. PAYMENT TO NEIGHBORHOOD PRESERVATION COMPANIES FOR HOMEOWN-
ERSHIP TECHNICAL ASSISTANCE AND TRAINING.
934. LEGAL AID AGREEMENTS.
935. ANNUAL REPORT TO THE LEGISLATURE.
S 930. DECLARATION OF LEGISLATIVE FINDINGS. THE LEGISLATURE HEREBY
FINDS AND DECLARES THAT THERE HAS DEVELOPED A DAMAGING IMPACT OF PREDA-
TORY AND SUBPRIME RESIDENTIAL MORTGAGE LENDING PATTERNS IN VARIOUS
VULNERABLE NEIGHBORHOODS AND COMMUNITIES OF THE STATE AND THAT THE
RELATIONSHIP BETWEEN THE PREDOMINANCE OF SUBPRIME LOANS AND HIGH CONCEN-
TRATIONS OF FORECLOSURE ACTIONS BEING FILED HAS BEEN FORECAST AND CLEAR-
LY DOCUMENTED. THE LEGISLATURE FURTHER FINDS THAT THE SCARCITY OF
RESOURCES DEDICATED TO HOUSING COUNSELING AND HOME BUYER EDUCATION
SERVICES HAS LEFT MANY FIRST TIME, LOW AND/OR MODERATE INCOME, OR MINOR-
ITY HOMEBUYERS AT RISK.
THE LEGISLATURE FURTHER FINDS THAT IN MANY URBAN COMMUNITIES WHERE
SUBPRIME LENDERS DOMINATE REFINANCING AND HOME EQUITY MORTGAGE MARKETS,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05889-01-1
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AND WHERE NECESSITY COMBINED WITH POOR DECISION-MAKING OFTEN PLACES LOW
AND/OR MODERATE INCOME HOMEOWNERS IN NON-SUSTAINABLE MORTGAGE PRODUCTS,
THE ADJUSTED COST OF A HOME IS FREQUENTLY EXCEEDED AS A RESULT OF REFI-
NANCING PRODUCTS, HOME EQUITY PRODUCTS COMPOUNDED WITH FIRST MORTGAGES,
AND RUNAWAY FEES. AS A RESULT MANY HOMEOWNERS ARE RENDERED AT RISK OF
FORECLOSURE. BESIDES THE PERSONAL TRAGEDIES THESE HOUSEHOLDS FACE, FORE-
CLOSURE FURTHER AFFECTS NEIGHBORHOODS AND COMMUNITIES BY DE-STABILIZING
THE CHARACTER OF THE AREA. THE LEGISLATURE FURTHER FINDS THAT IN ORDER
TO PREVENT AND/OR MITIGATE FORECLOSURES, FINANCIAL LITERACY MUST BE
IMPARTED TO INDIVIDUALS WHO ARE ABOUT TO PURCHASE A HOME OR ARE AT RISK
OF FORECLOSURE.
THE LEGISLATURE FURTHER FINDS THAT THE NEIGHBORHOOD PRESERVATION
COMPANIES WHICH HAVE BEEN ESTABLISHED THROUGHOUT THE STATE ARE INSTRU-
MENTAL AS PROVIDERS OF INFORMATION, TRAINING AND ASSISTANCE TO RESIDENTS
IN THEIR SERVICE AREAS IN NEED OF HOUSING SERVICES INTERVENTION IN THE
RETENTION OF AFFORDABLE HOMEOWNERSHIP; THAT CONDITIONS AGGRAVATED BY AN
AFFORDABLE RENTAL HOUSING CRISIS HAVE OVERBURDENED THEIR RESOURCES AND
ARE BEING COMPOUNDED BY THE DEMAND FOR HOME OWNERSHIP ASSISTANCE AND
FORECLOSURE PREVENTION; AND THAT THERE IS A NECESSITY FOR THE SERVICES
OF NEIGHBORHOOD PRESERVATION COMPANIES FAMILIAR WITH THE SPECIFIC NEEDS
OF THE RESIDENTS IN THEIR SERVICE AREAS TO PROVIDE TARGETED ASSISTANCE
TO EXISTING AND POTENTIAL HOMEOWNERS TO SECURE PERMANENT, AFFORDABLE AND
FISCALLY VIABLE HOMEOWNERSHIP. THE NECESSITY IN THE PUBLIC INTEREST FOR
THE PROVISIONS HEREINAFTER ENACTED IS HEREBY DECLARED AS A MATTER OF
LEGISLATIVE DETERMINATION.
S 931. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING WORDS AND
PHRASES SHALL HAVE THE FOLLOWING MEANINGS:
1. "COMMISSIONER" SHALL MEAN THE COMMISSIONER OF THE STATE DIVISION OF
HOUSING AND COMMUNITY RENEWAL.
2. "DIVISION" SHALL MEAN THE STATE DIVISION OF HOUSING AND COMMUNITY
RENEWAL.
3. "NEIGHBORHOOD PRESERVATION COMPANY" SHALL MEAN A CORPORATION ORGAN-
IZED UNDER THE PROVISIONS OF THE NOT-FOR-PROFIT CORPORATION LAW WHICH
HAS BEEN PRIMARILY ENGAGED IN ONE OR MORE NEIGHBORHOOD PRESERVATION
ACTIVITIES AS DEFINED IN SUBDIVISION FIVE OF SECTION NINE HUNDRED TWO OF
THIS CHAPTER.
4. "HOMEOWNERSHIP ASSISTANCE ACTIVITIES" SHALL MEAN COUNSELING FOR
DEFAULT AND FORECLOSURE PREVENTION, BUDGET MANAGEMENT, DEBT REDUCTION
PLANNING, CREDIT REPAIR, REFINANCING OPTIONS, IN THE RECOGNITION OF
PREDATORY LENDERS, CONSUMER SCAMS, HOMEOWNER BASICS AND THE HIRING OF
CONTRACTORS AND ALL SUCH OTHER ACTIVITIES AS MAY BE DEEMED ESSENTIAL TO
ENSURING THE PREVENTION OF FORECLOSURE.
5. "ACCESSIBILITY" SHALL MEAN CULTURAL AND LINGUISTIC ACCESSIBILITY TO
DIVERSE RESIDENTS.
6. "RESIDENTS" SHALL MEAN INDIVIDUALS OR FAMILIES WITH INCOMES NOT
EXCEEDING NINETY PERCENT OF MEDIAN INCOME RESIDING IN MUNICIPALITIES
WITH POPULATIONS OF TWENTY-FIVE THOUSAND OR GREATER INHABITANTS,
CURRENTLY IN RESIDENCE OR WITH EVIDENCE OF FORTHCOMING RESIDENCY IN THE
SERVICE AREA.
7. "SERVICE AREA" SHALL MEAN THE ESTABLISHED BOUNDARIES OF A NEIGHBOR-
HOOD PRESERVATION COMPANY AS SPECIFIED IN SUBDIVISION THREE OF SECTION
NINE HUNDRED THREE OF THIS CHAPTER.
8. "SIGNIFICANT" SHALL MEAN NO LESS THAN SEVENTY-FIVE PERCENT OF THE
SPECIFIED CONTRACTED SERVICES.
S 932. CONTRACTS WITH NEIGHBORHOOD PRESERVATION COMPANIES. 1. THE
COMMISSIONER SHALL ENTER INTO CONTRACTS WITH NEIGHBORHOOD PRESERVATION
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COMPANIES FOR THE PERFORMANCE OF HOMEOWNERSHIP ASSISTANCE ACTIVITIES.
SUCH CONTRACTS SHALL BE ENTERED INTO, HOWEVER, ONLY AFTER APPROPRIATE
FINDINGS BY THE COMMISSIONER AND SHALL BE SUBJECT TO THE LIMITATIONS AS
SET FORTH IN THIS SECTION.
2. PRIOR TO ENTERING INTO A CONTRACT WITH AN EXISTING NEIGHBORHOOD
PRESERVATION COMPANY, THE COMMISSIONER SHALL HAVE MADE A FINDING, THAT
THE COMPANY IS IN GOOD STANDING PURSUANT TO THE PROVISIONS OF PARAGRAPHS
(A) AND (B) OF SUBDIVISION FIVE OF SECTION NINE HUNDRED THREE OF THIS
CHAPTER AND THAT THERE IS A NEED FOR PROPOSED HOMEOWNERSHIP ACTIVITIES
BEING PROPOSED BASED ON THE DOCUMENTED SUBMISSION OF THE COMPANY.
3. PRIOR TO ENTERING INTO A CONTRACT WITH AN EXISTING NEIGHBORHOOD
PRESERVATION COMPANY, THE COMMISSIONER SHALL HAVE MADE A FINDING THAT
THE COMPANY HAS OR IS PREPARED TO ENGAGE IN SERVICES OR HAS EMPLOYED
PERSONS TO RENDER CULTURAL AND LINGUISTIC ACCESSIBILITY TO THE DIVERSE
TARGET POPULATION.
4. CONTRACTS ENTERED INTO HEREUNDER WITH NEIGHBORHOOD PRESERVATION
COMPANIES SHALL BE LIMITED IN DURATION TO PERIODS OF ONE YEAR, BUT MAY
THEREAFTER BE RENEWED, EXTENDED OR SUCCEEDED BY NEW CONTRACTS FROM YEAR
TO YEAR IN THE DISCRETION OF THE COMMISSIONER; THEY SHALL BE LIMITED IN
AMOUNT TO FORTY-FIVE THOUSAND DOLLARS PER YEAR AND SHALL NOT BE CONSID-
ERED PART OF THE AGGREGATE SUM LIMITATIONS IMPOSED UNDER SUBDIVISION
FOUR OF SECTION NINE HUNDRED THREE OF THIS CHAPTER.
5. PRIOR TO RENEWING OR EXTENDING A CONTRACT OR ENTERING A SUCCEEDING
CONTRACT WITH A NEIGHBORHOOD PRESERVATION COMPANY THE DIVISION SHALL
DETERMINE THAT:
(A) THE COMPANY SHALL HAVE SUBSTANTIALLY COMPLETED THE HOMEOWNERSHIP
ACTIVITIES SPECIFIED IN THE CONTRACT TO BE RENEWED OR SUCCEEDED;
(B) THE COMPANY SHALL HAVE RECEIVED THE SUMS AND FUNDS SPECIFIED IN
THIS SECTION; AND
(C) THE ACTIVITIES CARRIED OUT BY THE COMPANY PURSUANT TO ITS CONTRACT
SHALL HAVE RESULTED IN A SIGNIFICANT IMPACT ON THE NEEDS OF THE AT RISK
EXISTING AND POTENTIAL HOMEOWNERS IN THE SERVICE AREA.
6. PRIOR TO TERMINATING OR NOT ENTERING INTO A SUCCEEDING CONTRACT THE
DIVISION SHALL:
(A) DETERMINE THAT THE COMPANY IS IN VIOLATION OF THE TERMS AND CONDI-
TIONS OF THE CONTRACT OR THAT FUNDS PROVIDED PURSUANT TO THE CONTRACT
ARE BEING EXPENDED IN A MANNER NOT CONSISTENT WITH THE TERMS OR
PROVISIONS OF THIS ARTICLE; OR
(B) DETERMINE THAT THE SIGNIFICANT NEED IN THE SERVICE AREA HAS BEEN
FULFILLED;
(C) PROVIDE THE COMPANY WITH WRITTEN NOTICE, AT LEAST FORTY-FIVE DAYS
IN ADVANCE, OF ITS INTENT TO TERMINATE OR NOT RENEW THE CONTRACT AND
PROVIDE THE COMPANY WITH THE OPPORTUNITY TO APPEAR AND BE HEARD BEFORE
THE DIVISION WITH RESPECT TO THE REASONS FOR SUCH PROPOSED TERMINATION
OR NON-RENEWAL. AT THE SAME TIME THAT A COMPANY IS NOTIFIED OF THE DIVI-
SION'S INTENT TO TERMINATE, OR NOT RENEW THE CONTRACT, THE DIVISION
SHALL LIKEWISE INFORM THE SENATE AND ASSEMBLY MEMBERS WHO REPRESENT
AREAS WITHIN SUCH COMPANY'S GEOGRAPHIC BOUNDARIES.
7. THE DIVISION MAY TEMPORARILY WITHHOLD PAYMENTS AND MAY ELECT NOT TO
ENTER INTO A SUCCEEDING CONTRACT WITH ANY NEIGHBORHOOD PRESERVATION
COMPANY IF THE COMPANY IS NOT IN COMPLIANCE WITH THE CONTRACT OR HAS
WITHOUT GOOD CAUSE FAILED TO SUBMIT THE DOCUMENTATION REQUIRED UNDER THE
CONTRACT.
S 933. PAYMENT TO NEIGHBORHOOD PRESERVATION COMPANIES FOR HOMEOWNER-
SHIP TECHNICAL ASSISTANCE AND TRAINING. 1. EACH CONTRACT ENTERED INTO
WITH A NEIGHBORHOOD PRESERVATION COMPANY SHALL PROVIDE PAYMENT TO THE
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NEIGHBORHOOD PRESERVATION COMPANY FOR URBAN HOMEOWNERSHIP ASSISTANCE
ACTIVITIES WHICH THE COMPANY HAS PERFORMED.
2. PAYMENT TO NEIGHBORHOOD PRESERVATION COMPANIES PURSUANT TO THIS
ARTICLE SHALL BE RESTRICTED TO SUMS REQUIRED FOR THE PAYMENT OF SALARIES
AND WAGES TO EMPLOYEES OF SUCH COMPANIES AND FEES TO LEGAL CONSULTANTS
RETAINED BY THEM WHO ARE ENGAGED IN RENDERING HOMEOWNERSHIP ASSISTANCE
ACTIVITIES TO THE TARGET POPULATION.
3. PAYMENTS SHALL BE MADE BY THE DIVISION TO THE NEIGHBORHOOD PRESER-
VATION COMPANY, NOT LESS FREQUENTLY THAN SEMIANNUALLY AT OR PRIOR TO THE
COMMENCEMENT OF THE CONTRACT, TO COMPENSATE THE COMPANY FOR THE HOMEOWN-
ERSHIP ASSISTANCE ACTIVITIES WHICH IT SHALL UNDERTAKE TO PERFORM;
PROVIDED THAT WITH RESPECT TO CONTRACTS ENTERED INTO ON OR AFTER JUNE
THIRTIETH, THE FIRST SUCH PAYMENT SHALL BE MADE BY THE DIVISION BEGIN-
NING ON OR AFTER JULY FIRST OF THE FISCAL YEAR FOR WHICH AN APPROPRI-
ATION IN SUPPORT OF SUCH PAYMENT IS MADE AND PROVIDED FURTHER THAT THE
FINAL SUCH PAYMENT TO THE NEIGHBORHOOD PRESERVATION COMPANY SHALL BE
MADE NO LATER THAN MARCH THIRTY-FIRST OF SUCH FISCAL YEAR, UNLESS SUCH
PAYMENT HAS BEEN WITHHELD PURSUANT TO THE PROVISIONS OF SUBDIVISION
SEVEN OF SECTION NINE HUNDRED THIRTY-TWO OF THIS ARTICLE.
S 934. LEGAL AID AGREEMENTS. A PORTION OF THE FUNDS, NOT TO EXCEED
TWENTY PERCENT OF THE APPROPRIATION, FOR THE ACTIVITIES SPECIFIED UNDER
THIS ARTICLE SHALL BE DEDICATED, ON A COMPETITIVE BASIS AND BASED ON
NEEDS IDENTIFIED BY EACH COMPANY, TO LEGAL AID ORGANIZATIONS WITH ESTAB-
LISHED TIES TO THE NEIGHBORHOOD PRESERVATION COMPANY APPLICANT'S SERVICE
AREA FOR THE PROVISION OF LEGAL SERVICES. IN THE EVENT THAT SUCH
NOT-FOR-PROFIT LEGAL AID ORGANIZATIONS ARE NOT AVAILABLE, THE NEIGHBOR-
HOOD PRESERVATION COMPANY SHALL SUBCONTRACT WITH INDIVIDUAL ATTORNEYS OR
LAW FIRMS WITH THE APPROVAL OF THE COMMISSIONER.
S 935. ANNUAL REPORT TO THE LEGISLATURE. THE COMMISSIONER SHALL SUBMIT
AN ANNUAL REPORT TO THE LEGISLATURE ON OR BEFORE DECEMBER THIRTY-FIRST
ON THE IMPLEMENTATION OF THIS ARTICLE. SUCH REPORT SHALL INCLUDE, BUT
NOT BE LIMITED TO, FOR EACH COMPANY RECEIVING FUNDS UNDER THIS ARTICLE,
A DESCRIPTION OF SUCH COMPANY'S CONTRACT AMOUNT, THE SPECIFIC HOMEOWNER-
SHIP ACTIVITIES PERFORMED BY SUCH COMPANY, THE NUMBER OF PERSONS SERVED
BY THE COMPANY AND, IF APPLICABLE, ITS LEGAL AID CONSULTANT AND THE
IMPACT OF THE ACTIVITIES PERFORMED.
S 2. The sum of two million dollars ($2,000,000), or so much thereof
as may be necessary, is hereby appropriated to the state division of
housing and community renewal out of any moneys in the state treasury in
the general fund to the credit of the division of housing and community
renewal, not otherwise appropriated, and made immediately available, for
the purpose of carrying out the provisions of this act. Such moneys
shall be payable on the audit and warrant of the comptroller on vouchers
certified or approved by the commissioner of the state division of hous-
ing and community renewal in the manner prescribed by law.
S 3. This act shall take effect immediately.