New York -- New York State Comptroller Thomas DiNapoli and New York City Comptroller William Thompson, Jr. joined with leaders of New York ACORN Wednesday to urge the nation’s mortgage lenders and servicers to take concrete action to stem the tide of mortgage foreclosure across New York State. The comptrollers and ACORN released three principles that banks and lenders will be asked to put into action.

The call from the comptrollers and ACORN comes as ACORN released new data regarding the cost of foreclosure to New Yorkers and New York City’s economy. According to ACORN’s report, Foreclosure Exposure 2: The Cost to Our Cities and Neighborhoods, 2,297 high-cost loans made in 2006 in New York City will likely go into foreclosure.  The costs to all stakeholders involved could exceed half a billion dollars.

The Comptrollers and ACORN announced a joint initiative to enlist each of the banks and mortgage companies that service adjustable rate subprime loans in New York State and New York City to agree to the following Mortgage Affordability Principles:

• Engage in aggressive outreach to holders of subprime loans facing rate adjustment or that are in delinquency.  If a borrower cannot afford their loan, the lender or servicer should take steps to determine if the borrower qualifies for a loan modification.  This early intervention will prevent thousands of borrowers from becoming delinquent.
• Implement an affordability assessment that will help ensure a borrower’s ability to pay.  The assessment should consider the borrower’s monthly household expenses, including all income, mortgage principal, interest, property taxes and insurance, long-term secured debt and a reasonable amount for food, clothing, and utilities.
• Emphasize long-term solutions, including loan modification and conversion of adjustable rate loans to fixed rate mortgages.  Lenders and servicers of subprime ARMS should develop workable targets and criteria to permanently modify loans.