Lin, who created a sensation for the Knicks last season before being let go as a free agent in July, returned to Madison Square Garden and helped the Rockets deal first-place New York its first home loss of the season.
James Harden supplied 28 points and 10 rebounds for the Rockets, who broke a seven-game road losing streak.
Chris Copeland, starting in place of the injured Carmelo Anthony for the second straight game, netted 29 points for New York, which fell to 10-1 at home.
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