NY A02378

Establishes the "Home Equity Fraud Act" to protect senior citizens and minority homeowners from predatory lending practices targeting home equity through high-cost, high-interest mortgages.

Prohibits mortgage brokers and bankers from engaging in home improvement contract activities without full written disclosure and agreement from all parties, and caps broker fees at the greater of $500 or 3% of loan value.

Restricts mortgage provisions on primary residences by prohibiting balloon payments, negative amortization schedules, and interest rate increases after default.

Extends the home improvement contract cancellation period from 3 to 15 business days and requires homeowners receive written notice of cancellation rights at contract signing.

Requires mortgage lenders to disclose whether loans will be sold and provide foreclosure notice with homeowner defense information; establishes affirmative defenses for borrowers refinancing long-owned residences based on inability to repay and violations of lending law provisions.