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New York proposes 1-year moratorium on foreclosures

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Legislation that would give some New Yorkers facing foreclosure a one-year reprieve has passed the state assembly as part of a package of four bills aimed at stemming foreclosures. Assembly Bill 9695 would allow courts to impose a one-year moratorium on foreclosures in cases where borrowers can establish they live in the home subject to foreclosure, own no other property, have a subprime mortgage, and can continue to make reduced payments designed to preserve the lender's financial position while they negotiate for a loan modification. The bill defines a subprime loan as one that carries an annual rate of three or more percentage points above the yield of Treasury securities of comparable maturity. AB 9695, which must still be debated by the more conservative New York state senate, is part of a package of bills that would also provide up to three months of assistance payments to homeowners currently in default or foreclosure, and impose new restrictions on lenders. The b...