Bill > S06114

This bill enacts the "Home Equity Fraud Act" to protect homeowners, particularly seniors and minorities, from predatory lending practices. The legislation introduces multiple protections, including prohibiting mortgage brokers from acting as home improvement contractors, limiting fees charged by mortgage brokers to no more than 5% or $500, and restricting mortgage provisions that could harm borrowers. Specifically, the bill prevents mortgages from containing balloon payments, increasing principal balances, or raising interest rates after default. It requires mortgage lenders to provide clear disclosures about loan sales and borrower rights, and gives borrowers an extended 15-day window to cancel home improvement contracts. In foreclosure proceedings, lenders must now provide detailed notices explaining borrowers' potential defenses, such as being on a fixed income or not understanding the mortgage terms. The bill also allows courts to consider a borrower's financial circumstances when determining loan enforceability and potentially awards attorney fees to defendants if certain predatory lending practices are proven. The goal is to prevent unethical lending practices that can lead to home equity stripping and foreclosure, particularly in vulnerable communities.

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https://www.nysenate.gov/legislation/bills/2025/S6114