Bank settlement will find zero-interest loans for NY borrowers

by Ryan Smith27 May 2016
The state of New York has found a use for money from Goldman Sachs’ recent $5 billion settlement for soured mortgage bonds – zero-interest loans to help struggling homeowners avoid foreclosures.

Goldman Sachs agreed to the settlement in April. The $5 billion penalty included $190 million to New York. The state is using $100 million of that money for loans to troubled homeowners, according to a HousingWire report.

New York Attorney General Eric Schneiderman announced that the state will use the money to expand its Mortgage Assistance Program, which provides zero-interest loans so homeowners can “pay off small debts that are preventing them from securing a needed mortgage modification.”

The expansion is projected to help more than 3,000 families in the state avoid foreclosure, according to HousingWire.

The Mortgage Assistance Program provides loans that carry no interest rate and come due only upon the sale of the home, refinance, death of the borrower, ownership transfer or mortgage maturity, according to HousingWire. Ever dollar loaned under the program saves about $8.50 in property value for homeowners within 750 feet of a MAP loan recipient, Schneiderman’s office said.

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