Bill Text: NY S05474 | 2015-2016 | General Assembly | Amended
Bill Title: Relates to establishing the community restoration fund.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2016-06-16 - PRINT NUMBER 5474B [S05474 Detail]
Download: New_York-2015-S05474-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 5474--B 2015-2016 Regular Sessions IN SENATE May 14, 2015 ___________ Introduced by Sens. COMRIE, PERKINS -- read twice and ordered printed, and when printed to be committed to the Committee on Finance -- recom- mitted to the Committee on Finance in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee and committed to the Committee on Rules -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the state finance law, in relation to establishing the community restoration fund The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Statement of legislative purpose and findings. The legisla- 2 ture finds and declares that New York's mortgage foreclosure crisis 3 continues. Many New Yorkers are still unable to meet their mortgage 4 obligations. There are delays in the foreclosure process, homes are 5 sitting vacant or in a state of ill repair because of drawn out loan 6 modification and foreclosures, neighborhoods with high concentrations of 7 foreclosures are losing value and the owners are losing equity. Fore- 8 closures that were the result of the real estate downturn and great 9 recession will continue to be a problem within the state. The legisla- 10 ture finds that it is necessary to create a statewide program to stabi- 11 lize communities throughout the state by: (i) avoiding foreclosures and 12 ameliorating the effects of the mortgage foreclosure crisis; (ii) elimi- 13 nating blighted properties and vacant lots that bring down community 14 values and create attractive nuisances within communities; (iii) restor- 15 ing property tax income to counties and towns; and (iv) maintaining 16 affordable housing. Accordingly the legislature hereby creates the 17 community restoration fund. 18 § 2. Definitions. As used in this act, the following words and phrases 19 shall have the following meanings: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11044-05-6S. 5474--B 2 1 1. "Community development financial institution" or "CDFI" means an 2 organization located in this state which has been certified as a commu- 3 nity development financial institution by the federal community develop- 4 ment financial institutions fund, as established pursuant to 12 U.S.C. 5 4701 et seq. 6 2. "Fund manager" means a New York-based Community Development Finan- 7 cial Institution ("CDFI") fund manager. 8 3. "Program manager" means a property holding company that will own 9 and manage the assets purchased through the community restoration fund. 10 § 3. The state finance law is amended by adding a new section 99-z to 11 read as follows: 12 § 99-z. Community restoration fund. 1. There is hereby established in 13 the custody of the state comptroller a special fund to be known as the 14 "community restoration fund". 15 2. The community restoration fund shall consist of moneys deposited 16 therein by the state comptroller from the attorney general of the state 17 obtained through judgments and settlements with lending institutions for 18 subprime and predatory loans, for mortgage servicing and securitiza- 19 tions, claims related to mortgage practices, mortgage backed securities, 20 cases related to mortgage and mortgage securities in the London Inter- 21 bank offered rate and other mortgage foreclosure related cases and from 22 federal, state or local governments and private investors. Nothing 23 contained in this section shall prevent the state from receiving grants, 24 gifts or bequests and depositing them into the accessible electronic 25 information service fund according to law. 26 3. The moneys in the fund shall be used to: 27 (a) purchase mortgage notes on one, two, three and four family homes 28 at discounted rates with the intent of modifying the mortgage to an 29 affordable rate to keep current homeowners in the property; and 30 (b) acquire homes at discounted rates from lenders, and purchase homes 31 at auction or through short sale with the intent to: 32 (i) rent or sell back to homeowners with an affordable loan; 33 (ii) fund local, not-for-profit-development efforts to turn vacant 34 properties into affordable housing; 35 (iii) rehabilitate distressed properties for new owners if the proper- 36 ty was vacant; and/or 37 (iv) demolish homes beyond repair. 38 4. The urban development corporation shall select the fund manager and 39 program manager through the request for proposal process. 40 5. The fund manager shall: 41 (a) be responsible for the receipt, management and expenditure of 42 monies held in the community restoration fund; 43 (b) maintain books and records pertaining to all monies received and 44 disbursed pursuant to this section; 45 (c) receive public, settlement and other funds and use those funds to 46 purchase assets that will be held by the program manager; 47 (d) have the authority to acquire distressed assets and purchase mort- 48 gage notes on one, two, three and/or four family homes, whether current, 49 delinquent and/or in foreclosure, occupied, vacant or abandoned, where 50 purchased: 51 (i) by a fund manager at current appraised values; 52 (ii) through negotiated sales at FHA distressed asset stabilization 53 program sales; 54 (iii) through auctions, short sales, real estate owned properties or 55 properties identified by the not-for-profit organizations on the commu- 56 nity restoration fund council;S. 5474--B 3 1 (e) have the authority to transfer distressed assets to the program 2 manager; 3 (f) work with the community restoration fund council to develop strat- 4 egies for acquiring distressed assets and to identify opportunities to 5 acquire distressed assets; 6 (g) work with the program manager and the community restoration fund 7 council to identify not-for-profit developers able to implement disposi- 8 tions tailored to local needs, whether sales to new homeowners, use as 9 affordable rental property, or demolition and repurposing for other 10 community uses; 11 (h) make funds directly available to not-for-profit organizations and 12 developers for use to acquire, rehabilitate and/or finance properties 13 directly. These funds would be made available through a request for 14 proposal process conducted by a state agency in consultation with the 15 fund manager; 16 (i) develop a plan to make this a revolving loan fund; and 17 (j) apply for federal or private grant money that becomes available to 18 carry out the purpose of this section. 19 6. The program manager shall: 20 (a) own and manage the distressed assets acquired by the fund manager; 21 (b) have the power to modify mortgage notes on the acquired assets; 22 (c) with the input of the community restoration fund council, develop 23 disposition strategies tailored to the needs and market conditions in 24 the local communities where the distressed assets are located; 25 (d) work with the community restoration fund council to determine 26 optimal outcomes for acquired mortgage notes and properties; 27 (e) have a relationship with a specialty mortgage servicer whose role 28 is to assist with modifications of acquired mortgage notes; 29 (f) work with the fund manager and the community restoration fund 30 council to develop modification criteria; 31 (g) work with loan servicers and housing counselors to assist borrow- 32 ers with applications for loan modifications and refinancing; and 33 (h) work with the fund manager and the community restoration fund 34 council to identify not-for-profit developers able to implement disposi- 35 tions tailored to local needs, whether sales to new homeowners, use as 36 affordable rental property, or demolition and repurposing for other 37 community uses. 38 § 4. Community restoration fund council. 1. There is hereby estab- 39 lished the community restoration fund council consisting of thirty 40 members. The purpose of such council is to serve as an advisory board to 41 both the community restoration fund and the program manager, assist with 42 the identification of opportunities to acquire distressed assets, assist 43 in the development of disposition strategies tailored to meet the needs 44 and market conditions in the local communities where distressed assets 45 are located, work with the program manager to determine optimal outcomes 46 for acquired mortgage notes and properties, work with the fund manager 47 and program manager to determine the loan servicer's modification crite- 48 ria, and work with the fund manager and program manager to identify 49 not-for-profit developers able to implement dispositions tailored to 50 local needs, whether sales to new homeowners, use as affordable rental 51 property, or demolition and repurposing for other community uses. 52 2. The members of the council shall consist of: 53 a. The commissioner of the New York state department of economic 54 development; 55 b. The commissioner of New York state homes and community renewal;S. 5474--B 4 1 c. Twenty-eight community based, not-for-profit members with two 2 members from each of the regional economic development regions, with the 3 exception of New York city where there will be two community based, 4 not-for-profit members from each borough. 5 3. No member shall receive any compensation for his or her services. 6 § 5. Annual report to the legislature. The urban development corpo- 7 ration shall submit a report to the governor, the speaker of the assem- 8 bly and the temporary president of the senate on or before the first of 9 October, and annually thereafter, describing the use of the community 10 restoration fund pursuant to this act, including asset purchases, loan 11 modifications, home sales, rentals, property rehabilitations and other 12 information provided pursuant to this act, including: the number of 13 assets purchased, number of loans modified, number of properties rented 14 and a description of projects financed or assisted by fund monies; the 15 amount and source of funds leveraged; and such other information as the 16 state agency may deem appropriate. 17 § 6. The urban development corporation is hereby authorized to promul- 18 gate rules and regulations in accordance with the state administrative 19 procedure act that are necessary to fulfill the purposes of this act. 20 Such rules and regulations are to be completed within one hundred eighty 21 days of the effective date of this act. 22 § 7. This act shall take effect immediately.
