Enacts the "home mortgage bridge loan assistance act" to prevent avoidable home mortgage foreclosures by providing temporary bridge loan assistance; makes related provisions.
S05335 would create a new state program called the “home mortgage bridge loan assistance program” within the Division of Housing and Community Renewal to help certain homeowners who are temporarily unable to keep up with mortgage payments because of hardship beyond their control. The bill is aimed at preventing avoidable foreclosures by allowing the state to make temporary supplemental mortgage payments to lenders on behalf of eligible borrowers, bringing mortgages current and then continuing monthly assistance for a limited period while the borrower recovers financially.
The bill sets detailed eligibility rules. It generally applies to owner-occupied one- to four-family homes, condominiums, cooperatives, and manufactured homes in New York, and it is limited to borrowers with income below 120 percent of area median income before the hardship event. Applicants must show a qualifying hardship such as involuntary job loss or involuntary reduction in earnings, must be facing foreclosure or at least 60 days delinquent, and must demonstrate a reasonable likelihood of resuming full payments within 24 months, or 36 months during periods of high unemployment. Assistance is capped at $60,000 and may not extend beyond 36 months.
The bill also changes foreclosure timing and notice requirements. Mortgage lenders and servicers could not accelerate an eligible mortgage or begin foreclosure until the borrower receives a prescribed notice, has an opportunity to meet with a consumer credit counseling agency, and the state has ruled on the assistance application or the relevant waiting periods have expired. While an application is pending, foreclosure proceedings would be stayed. The bill also requires notices from the Department of Labor to unemployment insurance claimants informing them that they may be eligible for assistance.
If assistance is approved, the state would pay arrears and ongoing mortgage installments directly to the lender, while the borrower would make monthly payments to the state based on a formula tied to housing costs and income. The state’s payments would be treated as a loan to the borrower, secured by a lien on the property and repayable with interest over time, with repayment deferred when the borrower’s income is too low. The bill also creates a dedicated Home Mortgage Bridge Loan Assistance Fund in the State Finance Law, including a separate account for funds contributed by financial institutions under the Community Reinvestment Act.
No committee transcript or vote history is provided, so there is no recorded legislative debate or roll-call sentiment in the materials supplied. Based on the bill text itself, the measure is framed as a foreclosure-prevention and housing-stabilization proposal, with clear support for distressed homeowners and an emphasis on preserving neighborhoods and limiting economic harm. Potential points of contention include the cost to the state, the creation of a new lending and lien structure, the mandatory foreclosure delays, and the administrative burden on lenders, servicers, and the housing agency.
The bill would amend the Private Housing Finance Law by adding a new Article 28 establishing a state-run mortgage bridge loan assistance program, and it would amend the State Finance Law to create a special Home Mortgage Bridge Loan Assistance Fund. It would give the Division of Housing and Community Renewal authority to make temporary mortgage payments for eligible homeowners, impose notice and waiting-period requirements before foreclosure on covered loans, and create a repayment mechanism secured by a lien on the property. It would also require the Department of Labor to notify unemployment insurance claimants about possible eligibility for assistance.
The bill’s stated purpose and structure reflect a strongly pro-homeowner, anti-foreclosure policy approach, with the legislature finding that temporary assistance can stabilize families, neighborhoods, lenders, and the broader economy. Because no committee discussion or votes are included, there is no direct evidence of support or opposition from lawmakers in the provided record. The text itself suggests the bill is intended as a consumer-protection and foreclosure-mitigation measure rather than a punitive or regulatory expansion for its own sake.
Likely points of contention are the fiscal exposure to the state, since the program relies on appropriations and could advance up to $60,000 per borrower over as long as 36 months; the foreclosure stay and notice requirements, which would delay lender remedies; and the administrative complexity of determining eligibility, monitoring income, and managing repayments. Lenders and servicers may object to the mandatory process and temporary restrictions on enforcement, while supporters would likely emphasize the bill’s narrow eligibility criteria, repayment structure, and focus on borrowers facing temporary hardship beyond their control.