Wednesday, December 3, 2008

State Legislation to Address Foreclosure Crisis by Stephen Geffon - Leader-Observer

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Members of the board of the Sisterhood of the Rockwood Park Jewish Center and community leaders at last week’s open community meeting.
From left to right are Sue Bildner, vice president, Lenore Greenberg, president, Mary Fydell, Rabbi Tzvi Berkowitz, Frank Gulluscio, Democratic district leader, and
Betty Braton, chair of Community Board 10
Photo:Stephen Geffon

Foreclosure, a pressing issue of concern to community residents, was discussed by Community Board 10 Chairwoman Betty Braton at last week’s open meeting of the Sisterhood of the Rockwood Park Jewish Center in Howard Beach.

Community Board 10 is bounded by Liberty Avenue/103rd Avenue on the North, Van Wyck Expressway on the East, 165th Avenue and JFK Airport on the South and the Brooklyn/Queens Line on the West.

Braton cited a study by NYU’s Furman Center for Real Estate and Urban Policy that found that on average one in every three homes in Queens faced foreclosure. She said that many senior citizens who got conned into taking out the equity on their homes are now in dire straits.

Braton noted that not only are the homeowners are affected by the foreclosure, but so are the renters who also face eviction when a property is foreclosed.

Councilman and Senator-elect Joseph P. Addabbo was recently quoted in a newspaper interview regarding the foreclosure crisis.

“We’re seeing a ripple effect as property values plummet and surrounding neighborhoods experience an increase in quality of life issues like graffiti and crime,” the councilman said, adding that often foreclosed homes fall into disrepair and attract illegal activity.

Addabbo noted that foreclosed properties directly correspond to an increase in neighborhood violent crime by 6.7 percent.

The councilman said that homeowners living near foreclosed properties would see their property values decrease by $5,000 on average per each foreclosed home.

In an effort to help New Yorkers affected by the foreclosure crisis, Governor David Paterson has signed into law a critical sub-prime lending reform bill that directly addresses the mortgage crisis in New York State.

According to the Governor’s Office, the new law will immediately help protect people from losing their homes and mandates reforms to help avoid a similar crisis in the future. The bill also takes into consideration the importance of striking the right balance between consumer protection and the availability of affordable credit.

Paterson’s office explained that the bill works in two ways: immediately helping to prevent New Yorkers from losing their homes by assisting those who are currently facing foreclosure and by attacking flaws in New York’s banking regulations to prevent such a crisis from happening again.

The immediate focus of the bill is on existing homeowners facing foreclosure. The bill requires lenders to send a pre-foreclosure notice to borrowers at least 90 days before foreclosure proceedings may be initiated. This will encourage homeowners to seek help prior to the initiation of foreclosure proceedings. The bill would also require lenders to list in the notice government-approved housing counselors serving the borrower’s area.

The bill establishes a mandatory settlement conference for foreclosure proceedings involving homeowners with certain sub-prime loans. For homeowners who cannot afford an attorney, the court, under certain circumstances, may appoint one.

The bill also requires plaintiffs in an action against a homeowner to make an affirmative allegation that they have standing to bring the foreclosure action and have complied with certain applicable laws. Ownership of the mortgage and the note is sometimes uncertain, which has lead to questionable foreclosure practices.

The bill includes provisions to address foreclosure rescue scams intended to take advantage of borrowers when they are most vulnerable. This bill will prohibit upfront fees and require a written contract from so-called “distressed property consultants.”

Braton said the city has set up an initiative to prevent foreclosures. “If you know of anyone who is behind in a mortgage tell them not to wait until it is too late,” said Braton who urged these residents to contact Pam Glaser, director of Foreclosure for the city’s Housing Preservation and Development agency, who will refer them to a legitimate agency that can assist them. Glaser can be contacted at (212) 863-6721.