NY A02852

Establishes the "Home Equity Fraud Act" to prohibit predatory lending practices targeting senior citizens and minority homeowners, including high-cost mortgages based on home equity rather than ability to pay.

Restricts mortgage brokers and bankers from engaging in home improvement contracting activities and caps broker fees at the greater of $500 or 3% of the loan amount, with total lending fees not to exceed 6% of loan value.

Prohibits certain mortgage provisions on primary residences including balloon payments, negative amortization schedules, and interest rate increases after default.

Requires lenders to provide written disclosure of loan sale plans and notice of right to designate a third party to receive loan communications, with a 30-day delay on loan sales or enforcement if disclosures are not made.

Extends home improvement contract cancellation rights from 3 business days to 15 business days and creates affirmative defenses in foreclosure actions for borrowers who lack financial ability to repay, were living on fixed income, or are subject to unlawful lending practices.