New York's Zero-Interest Loans Help Fight Foreclosures

May 26, 2016

The state of New York is offering up a $100 million expansion in zero-interest loans in order to prevent homes from falling into foreclosure. The state funds are coming from Goldman Sachs and are a part of the firm’s agreement to pay $5 billion from a mortgage settlement over toxic mortgage bonds.

New York Attorney General Eric Schneiderman says the state will use the funds to expand its Mortgage Assistance Program, which provides zero-interest loans to New Yorkers who are struggling to make their mortgage payments. The money allocated will help an estimated 3,000 New York families avoid foreclosure, Schneiderman says.

The program also sets out to salvage nearby property values, which can be hampered by foreclosures in the area. So far, $18 million loans distributed under the program, which launched in 2014, have helped to preserve an estimated $153 million in property values of nearby home owners, according to an analysis conducted by Schneiderman’s office. Every $1 in loans preserves about $8.50 in property values for home owners within 750 feet of a Mortgage Assistant Program loan recipient, according to the analysis.

“Since taking office, my number one priority has been getting New Yorkers the resources they need to rebuild from the housing crisis,” Schneiderman says. “This new investment in the MAP program will help thousands of New York families keep their homes and rebuild their communities. This program is already having an incredible impact in communities throughout the state and I am excited to expand it to even more families.”

Source: “New York to Provide $100 Million in Zero-Interest Loans to Prevent Foreclosures,” HousingWire (May 25, 2016)