The problem of predatory lending has been widespread across the country and particularly here in New York. Over 4000 foreclosures that are linked to the practice were discovered in Brooklyn alone. Senator Schumer recently spoke out about the need for change but we need action and not just words. Well the New Yorkers for Responsible Lending have come up with a model bill for the Legislature to enact.
From the DMI Blog:
III. REMEDIES
* The law is enforceable by the NYS Attorney General, Banking Superintendent, or any party to a loan covered by the law.
* Actual and statutory damages may be awarded; statutory damages shall be $5,000 per violation or two times actual damages (whichever is greater). Injunctive relief to stop unlawful practices, as well as declaratory and other equitable relief as the court deems appropriate, may be granted. The court may award reasonable attorneys' fees to a prevailing borrower.
* The loan transaction may be rescinded if the lender is found to have violated prohibitions against making unaffordable loans and/or negative amortization loans.
* Borrowers may assert defenses against loan purchasers ("assignees") that they could assert against the original lender.
* The law includes good faith exceptions. No violation of the law shall be found if the lender:
* Notifies the borrower of the compliance error and provides and an opportunity to cure, within 30 days of making the loan; or
* Can show that it failed to comply with the law because of bona fide error.
And those are just the remedies, click on the link for the full list of what the bill would do. Now the only thing is to get the bill into action and passed by our Legislature. Will New York's Statehouse do what is necessary to help it's citizens that have been victimized by predatory lenders? Time will only tell. So make sure to let your own representative know how important this issue is.
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