NYS Comptroller Tom DiNapoli: Economic Recovery Uneven Across New York State

New York State has taken the first steps down the road of economic recovery, but that recovery has been slow going and uneven across the regions of the State, according to a report issued today by New York State Comptroller Thomas P. DiNapoli.


“The recession didn’t hit New York as hard as other states,” DiNapoli said. “But there’s still a lot of pain. Our economic recovery is headed in the right direction, but the road out of recession is still winding and potentially perilous.”


“The recovery so far has been a mixed bag. Private sector employment is up while public sector employment is down. Home values in the major metropolitan upstate areas rose sharply in the fourth quarter of 2010, but have begun to decline again in the New York City metropolitan area. Rising oil and gas prices, disruptions due to the crisis in Japan, and
low consumer confidence could hold back economic activity. Our economy is improving, but the pace of the recovery is clearly slower than we’d like.”


New York’s Gross State Product grew at an annual rate of 2.2 percent during 2010, after two consecutive years of decline. Economic output in all metropolitan areas rebounded in the past year, with Ithaca leading the way with a 3.3 percent change, followed by the Mid-Hudson Valley at 3.1 percent, Buffalo at 2.9 percent and Rochester and the Utica-Rome regions at 2.4 percent. IHS Global Insight predicts that the Gross Metropolitan Products of most New York cities will slow during 2011.


Job losses during the recession were less severe in New York State (3.8 percent) than in the nation (6.1 percent). Despite this, New York State lost nearly 336,700 jobs. Overall, unemployment in New York State doubled during the recession, and by March 2011 had only eased to 8 percent from a recent peak of 8.9 percent in September 2009. DiNapoli
noted that private sector employment, led by tourism, health services and education, grew by 95,100 jobs during 2010 and by another 27,600 jobs in the first quarter of 2011. Public sector employment declined by 28,200 jobs (1.9 percent) between December 2009 and March 2011.


Personal income rose by 4.1 percent during 2010, the second-highest rate of growth among the states behind only New Mexico, which reflects modest job growth and higher Wall Street bonuses. Wall Street, which earned $27.6 billion in 2010, the second-best year on record, has regained 9,700 of the 28,200 jobs the securities industry lost during the
recession.


Home values in the downstate region have begun to decline again and foreclosures will continue to hold down prices. Home values in the New York City metropolitan area peaked in May 2006 and fell by more than 20 percent through April 2009. Between October 2009 and February 2011, home values in the New York metropolitan area fell by 4 percent.
However, median home values in the five major upstate metropolitan regions rebounded strongly in the fourth quarter of 2010 over their values in 2009 with Binghamton (15.6 percent) leading the way, followed by Buffalo (14.3 percent), Syracuse (7.9 percent), Albany (7.6 percent) and Rochester (5.2 percent).


While the share of mortgages that are at least 90 days delinquent eased to 3.6 percent in the fourth quarter of 2010, the share of mortgages in the foreclosure process has continued to rise, reaching 5.2 percent in that same time period.


For a copy of the report visit: http://www.osc.state.ny.us/reports/economic/nys_econ_rpt2-2012.pdf

Backyards Not Bonuses - New York Communities for Change

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New York Communities for Change

Not the Way Forward: Jumaane Williams from New York Communities for Change on Vimeo.

Despite the fact the only a fraction of homeowners who sought help received a permanent mortgage modification from JP Morgan Chase, the bank's CEO, Jamie Dimon, just received a $17 million dollar bonus.
Clearly, Chase is out of touch with the consequences the financial industry's reckless practices continue to have in our communities.


Yesterday, NYC Council Member Jumaane Williams kicked off a campaign by New York Communities for Change in rockstar fashion!


Cheered on by fellow Council Members and dozens of NYCC protesters, Williams stormed JP Morgan Chase’s Park Avenue branch. Protesting the bank's awful record on helping families who are facing foreclosure and haven't received assistance with their mortgages, Williams closed his Chase account.

Can you continue our fight against Chase and pitch in $17? That's just 1/1,000,000 of Jamie Dimon's bonus.

In the coming weeks, many other elected officials, clergy members and unions will follow suit, drawing attention to Chase’s terrible record on modifying mortgages of distressed homeowners in New York.

Council Members Williams, Melissa Mark-Viverito, Mathieu Eugene and James Sanders were the first on the scene, but this is only the beginning.

Just 6 percent of NY homeowners who sought help have received a permanent mortgage modification from JP Morgan Chase - the other 94 percent have been denied or are in limbo. 


That’s a shocking number when their CEO just received a $17 million bonus!
Please help us take this campaign to the next level by contributing $17 dollars.


It might seem like a small amount (just 1/1,000,000th of Jamie Dimon’s bonus!), but it will go a long way in helping us make sure that everyone who googles Chase will see the truth about their lending practices.

Click here to chip in.

Launch of New Consumer Financial Protection Bureau (CFPB) Website

A quick video introduction to the Consumer Financial Protection Bureau (CFPB) -featuring narration by Ron Howard
 .

The central mission of the CFPB is to make markets for consumer financial products and services work for Americans—whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.

In July 2010, Congress created a new federal agency to protect American consumers. The Consumer Financial Protection Bureau will be a cop on the beat, working to make consumer financial markets work better for American families. As the first new consumer agency of the 21^st century, we can communicate directly with the people we serve. Today, that work is just beginning. We’re moving quickly—building a terrific team, finding office space, and unpacking a lot of boxes.

Things aren’t all in place yet, but we don’t want to delay reaching out to the people who care about this agency. We’re excited to announce the launch of our website, ConsumerFinance.gov, for one very important reason – to start a conversation with you. With the launch of our site, we will be Open for Suggestions.

We hope you are eager to learn what this new agency will do and how it might affect you. In turn, we are definitely eager to hear what you have to say. Starting today, you can use the Internet to send us your best suggestions and questions for the bureau:

• If you have a video camera, record a YouTube video and upload it as a response to our welcome video athttp://www.youtube.com/CFPB.
• If you like Twitter, tweet your suggestion using the hashtag #CFPB. You can also follow us at http://www.twitter.com/CFPB.
• If you are on Facebook, you can “Like” us at http://www.facebook.com/CFPB, and post your suggestion on our wall.
• If you want to use our website, you can post suggestions at http://www.consumerfinance.gov/openforsuggestions.

In the coming days and weeks, staff who are building this new agency will record direct video responses to some of the most frequent questions and most interesting suggestions. You’ll see the faces and meet the people who come to work every day to make a difference for the American people. We look forward to getting to know a little more about you, too. More is coming, so be sure to check back athttp://www.consumerfinance.gov/openforsuggestions throughout the coming weeks.

Open for Suggestions is just one way that we plan to keep our conversation going with you. Be funny! Be creative! Most of all, be real about what matters to you. This is a great chance to go into your community with a camera, laptop, or mobile phone, or just a pen and paper, and help others participate. Involve your friends, your family, your colleagues and classmates, your faith community, and anyone you know who might be counting on this agency for information and help. If you aren’t ready with a specific comment, that’s OK. Just let us know you are there—and stay in touch.

We can’t do it without you.

Thanks,

Elizabeth Warren

Queens Museum - Sunday Feb 13 - Richard Plunz and Damon Rich in Conversation

In the shadow of the recent-and ongoing-housing crisis in the United States, the Queens Museum of Art will host a conversation between Richard Plunz, urbanist, designer and the Director of Urban Design Program at Columbia’s Graduate School of Architecture, and Damon Rich, designer and founder of Center for Urban Pedagogy .

Both Plunz and Rich, known for their contributions in the larger discourse of urban planning and design, have works featured in exhibition “Structure has a Life with Personality:” Art about Architecture from the QMA collection (November 14-February 13, 2011).

At the Queens Museum, Plunz and Rich will engage in a wide-ranging intergenerational conversation touching on their research on the interplay between society and its living environments, the impacts of contemporary ways of life on the urban sphere, and the use of architectural models within gallery spaces.

Plunz’s New York Paleotectonic 1964 -95 (1995), a unique three-dimensional hanging graph made from building models removed from the Queens Museum’s Panorama of the City of New York, is on view at the QMA for the first time since 1996. In accordance with Plunz’s larger project, the piece suggests how changes in urban infrastructure register deeper social and economic change.

Rich’s solo exhibition Red Lines Housing Crisis Learning Center was on view at the Queens Museum of Art May 31-September 27, 2009. Two works from this exhibition, recently acquired by the Museum, are on view in the current exhibition: Real Estate Sites consists of photographic documentation of mortgage brokerages, viewed as “buildings that manage the buying and selling of other buildings,” and Mortgage Stakeholders, a 47-minute video staging a fictional conversation between bankers, regulators, architects, investors, and financial justice advocates.

Additional info:

When: Sunday February 13th - 4pm - 6pm

Where: Queens Museum of Art - NYC Bldg, Flushing Meadows Corona Park, Queens NY 11368

Phone: 718-592-9700

Free & Open to the Public, Followed by Light Refreshments

Elizabeth Warren's Greatest Hits by Daniel Mintz - MoveOn.org

Elizabeth Warren's Greatest Hits from Daniel Mintz on Vimeo.


Populist hero Elizabeth Warren was recently nominated to lead the Consumer Financial Protection Bureau by President Obama. Check out her greatest hits to see why she's going to be such an amazing advocate for consumers.

Opinion: Giving Small Banks a Chance to Thrive - Elizabeth Warren - POLITICO.com

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The bankers I have talked with are not looking to Washington to solve their problems. But they are looking for a market that allows them to compete. They are looking for a regulatory structure that doesn’t require an army of lawyers, and a level playing field that lets customers see the true cost of a product -- so lenders do not need to compete against a phantom price.

We are only at the beginning of our work and most of the consumer agency’s authorities have yet to phase in. But the direction of the agency is coming into focus. We want to level the playing field by streamlining regulations and eliminating outdated or ineffective rules. We want to make it easy for banks—large and small—to meet their obligations to their customers and to make the costs and risks of credit clear.ntinue Reading

My first week here, the agency’s implementation team launched a mortgage disclosure project with the ultimate goal of giving consumers better information while reducing the number of redundant federal forms. It is only a start -- but a good one.

We want to build outreach to small providers into this new agency’s DNA. Whether in Washington or outside the beltway, we are aiming to maintain a continuing conversation with community bankers and credit unions to make certain that they are included from the beginning in all initiatives.

This effort is critical not only because of the instructions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, but also because it is the right thing to do.

A generation of flat wages and rising basic expenses has hammered families. Too many middle class families have spent all their income and all their savings, and they have taken on debt to pay for college, to cover serious medical problems or just to stay afloat a little while longer.

Too often that debt is poorly understood, and terms buried in the fine print have cost customers dearly. The new consumer agency can serve families by making credit easier to understand and making markets more competitive.

But families can’t benefit over the long run if only a handful of banks are left standing. Families will be protected only if they can count on a robust, diversified banking industry. To serve American families, the new consumer agency needs to work with America’s community banks to make sure that there are a range of services and options available -- now and in the future.

Elizabeth Warren is an assistant to the president and a special advisor to the Treasury secretary for the Consumer Financial Protection Bureau.

Photo by Tony Rinaldo

Former President of Queens Mortgage Brokerage Firm Pleads Guilty to $23 Million Fraud Case - Channel 6 News »

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The former President of GuyAmerican Funding Corp., a mortgage brokerage firm in Queens, New York, pleaded guilty on Friday to participating in a $23 million fraud scheme, prosecutors said.

David Ramnauth, 54, of Levittown, New York, was charged in a superseding indictment along eight other defendants. He was accused of conspiracy to commit bank and wire fraud. As the President of GuyAmerican, he facilitated a massive mortgage fraud scheme conducted through the branch office in Jameica, New York.

Three co-defendants, Peggy Persaud, Orette Killikelly and George Esso were loan officers at GuyAmerican. They received thousands of dollars in commissions based on fraudulent loan applications submitted to lenders.

Elton Lord, Rafick Baksh and Mahamood Hussain recruited homeowners in financial distress who were willing to sell their homes. They worked along the loan officers and used straw buyers who posed as the buyers for a fee.

The three recruiters obtained mortgage loans using fraudulent representations, including the straw buyers supposed net worth, employment, and income. They re-sold the properties with inflated market values, sometimes even for the double of the original price.

After the fraudulent loans were submitted, Ramnauth directed through a GuyAmerican loan officer to have the closing attorneys set aside six months' worth of mortgage payments from the closing proceeds in order to conceal the fraud from lenders.

Ramnauth faces a maximum penalty of 30 years in prison and he was ordered to forfeit the fraudulent proceeds. All other defendants have also pleaded guilty with the exception of Baksh and Hussain, who remain at large.

“Access to Justice in Lending Act” Passes Both Houses of Legislature...

When Signed By Governor, Legislation Will Level the Legal Playing Field for Homeowners Facing Foreclosure by Allowing Successful Borrowers to Recover Attorneys Fees Against Banks

Assemblyman Rory Lancman (D-Queens) and Senate Deputy Majority Leader Jeff Klein (D-Bronx) announce passage of the “Access to Justice in Lending Act” (A.1239/S.2614) by both houses of the legislature. Virtually all mortgage agreements require borrowers to pay attorneys fees to lenders who foreclose on their mortgage, but borrowers don’t have the same contractual right. As a result, few homeowners are able to retain attorneys in foreclosure proceedings – most default or try to represent themselves -- even though many homeowners have valid defenses to foreclosure and could save their homes with adequate legal representation. To add insult to injury, these homeowners then have the banks’ attorneys fees tacked on to the overall amount they owe the bank, pushing desperate homeowners further into debt. This bill creates a reciprocal right to attorneys fees for borrowers who successful defend against foreclosure where the mortgage agreement gives such a right to lenders, and is modeled on an existing provision of the law which give tenants the same reciprocal rights to attorneys fees in residential leases.

“We cannot let people with valid defenses to foreclosure lose their homes merely for lack of legal representation, particularly when the mortgage agreement written by the bank tilts the legal playing field in the bank’s favor,” said Assemblyman Lancman (D-Queens). “If homeowners had the money to pay for a lawyer to represent them in foreclosure, they probably wouldn’t be in foreclosure in the first place. This legislation will allow lawyers to take on meritorious foreclosure cases with the fair and reasonable expectation that they will be compensated if they succeed.”

"We know that many of the families that we see being foreclosed upon today entered into their mortgages due to predatory lending. These are the very people who should have the best defenses to foreclosure, but lose their homes simply because they could not secure counsel to defend them. Today, we have put homeowners on even playing ground with the lenders that are foreclosing on them, and given them a fighting chance to stay in their homes," said State Senator and Deputy Majority Leader Jeffrey D. Klein (D-Bronx/Westchester).

Queens Con Artist Raghunath on Lam in $7M Mortgage Fraud by John Marzulli - NY Daily News

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The FBI is hunting for a Queens man who went on the lam last week before he could be arrested for masterminding a $7 million mortgage fraud scheme.

Ishwardat (Danny) Raghunath, 46, a Guyanese national, is accused of ripping off lenders and leaving numerous homes in foreclosure.

He allegedly recruited straw buyers with good credit ratings to purchase homes in Queens, Brooklyn and the Bronx, according to an indictment in Brooklyn Federal Court.

In exchange for a $5,000 fee for using their names, the buyers were promised that they would not have to make payments on these "investment opportunities," the indictment says.

Raghunath submitted bogus mortgage applications to lenders, inflating the sales price of the properties, then deposited the loan money in a bank account he controlled.

After several months the mortgage payments stopped, and the lenders brought foreclosure actions against the buyers.

Also charged in the scheme are Halal Ahmed, 40, of the Bronx, and Phyllis Seemongal, 49, of Queens. They were arraigned on bank and wire fraud charges on Tuesday.

When FBI agents went to Raghunath's home in South Ozone Park on Monday night, he was already gone, said a spokesman for the FBI.

Anyone with information about his whereabouts is asked to call the FBI at (212) 384-5000.

Addabbo: Landmark Legislation Will Protect New Yorkers From Foreclosure

Bill Protects Homeowners at Risk of Losing Their Homes, Prevents Similar Crises from Happening in the Future

New York State Senator Joseph P. Addabbo, Jr., announced today that the New York State Senate passed critical legislation yesterday to protect homeowners across the state. Expanding upon legislation passed by the Senate in 2008, this bill provides four additional measures that he supported to protect homeowners at risk of foreclosure and to prevent similar crises from occurring in the future, which Governor Paterson is expected to sign into law.

New York’s housing market has suffered a particularly severe fallout in the wake of the housing crisis in the U.S., with over 50,000 new foreclosure filings in 2008 alone, a 30 percent increase over the preceding year. A staggering 58,000 outstanding mortgage loans in New York entered some form of delinquency in September 2009. Over the next four years, over 230,000 additional homes are expected to be lost to foreclosures, costing the state’s economy over $4 billion.

Explains Addabbo, the Senate has enacted these four provisions to safeguard homeowners:

· Safeguarding Distressed Homeowners: Requires that lenders and mortgage servicer provide a foreclosure notice to all distressed borrowers at least 90 days before any legal action may be commenced.

· Expansion of Mandatory Settlement Conference: Expands the number of borrowers who are eligible to receive the benefit of this settlement conference to holders of all types of home loans for a period of five years. Also requires litigants to negotiate in good faith to try to reach a mutually agreeable resolution.

· Protecting Neighborhoods and Tenants: Requires a plaintiff in a mortgage foreclosure action to maintain the property in compliance with certain sections of the NYS Building code or other local housing code. If property is occupied by a tenant, it must remain in safe and habitable condition.

· Protecting Distressed Homeowners from Rescue Scams: Precludes any licensees or registrants from accepting up-front fees in connection with performing the business of distressed property consulting. Additionally, this provides a mortgage broker with three days to disclose the exact amount and methodology of total compensation that the broker will receive.

Senator Addabbo notes, “The spike in home foreclosures as a result of widespread sub-prime lending has hit every corner of my district. With unemployment figures expected to continue to rise, we have not yet seen the peak in the number of people who can’t pay their mortgages. In fact, no New Yorker or area of the state is immune to the deep and lasting economic impact of this crisis—homeowners, tenants and whole communities are affected. Lowering the alarming rate of foreclosures in New York and helping families in Queens to save their homes were priorities for me during this special session in Albany, in order to build the foundation for a lasting, sustainable economic recovery.”

Chairman Towns’ Statement on Committee Investigation into Mortgage Crisis...

Chairman Edolphus “Ed” Towns (D-NY) today made the following statement on the House Oversight and Government Reform Committee’s investigation into the role of mortgage lenders in the financial services crisis and the economic recession.

“The actions of mortgage lenders contributing to the foreclosure and financial crisis are of serious concern to many Americans and to the Members of this Committee,” said Chairman Towns. “That is why I have opened an investigation into whether mortgage companies employed deceptive and predatory lending practices, or improper tactics to thwart regulation, and the impact of those activities on the current crisis.”

Numerous reports over the past year indicate widespread predatory lending practices by some of the nation’s largest banks, including sub-prime mortgage lending, deceptive marketing, predatory and deceptive mortgage products, predatory primary and secondary mortgages, predatory and deceptive re-financings, and predatory foreclosures. Moreover, it appears that certain classes of borrowers were targeted for these predatory and deceptive mortgage products and practices, based on age, race, and income. Examples of possible predatory mortgage products include sub-prime mortgages, certain adjustable rate mortgages, and so-called “option-pay” or “option-ARM” mortgages.

In addition, there are indications that members of the financial services industry conspired to deceive regulators and the public to obtain regulatory favors, lax enforcement, and regulatory protection for schemes intended to deceive and defraud home purchasers, homeowners, regulators, and investors.

As part of the investigation, the Committee is demanding information from the nation's largest mortgage lenders, including Wells Fargo, Bank of America (including Countrywide), JP Morgan Chase (including Chase Manhattan Bank), Citigroup, Residential Capital (GMAC), and U.S. Bank Home Mortgage, as well as issuing a subpoena for records on Countrywide Financial's VIP program.

“It is my goal to work through this matter in a bipartisan fashion and conduct a complete review of the role of mortgage companies in the current financial crisis. As part of this, we need to clarify unanswered questions about Countrywide Financial's VIP program, so I am issuing a subpoena to gather information about how that program worked and whether it provided special benefits to government officials. I am prepared to issue additional subpoenas if other companies fail to respond to our document requests,” Towns said.

Towns added, “In line with the commitment to an ethical and accountable Congress, the subpoena to Countrywide covers records that could show special treatment for Members of Congress. For reasons of jurisdiction, the subpoena directs that any such documents be sent to the House Committee on Standards of Official Conduct."

“Finally, I would like to address the widespread false reports that I locked Republicans out of their offices earlier this week. These reports are incorrect. Republicans have at no time been denied access to the hearing room or their offices. The Ranking Member and I discussed how we can cooperate to prevent violations of House rules governing the use of hearing rooms, we reached agreement, and I consider this matter resolved.”

Text of the Chairman’s letter to Wells Fargo, Bank of America (including Countrywide), JP Morgan Chase (including Chase Manhattan Bank), Citigroup, Residential Capital (GMAC), and U.S. Bank Home Mortgage is included below.

###

Friday, October 23, 2009

Dear ,

The Committee on Oversight and Government Reform is investigating the role of mortgage lenders and brokers in the financial services crisis and the economic recession.

Numerous reports over the past year indicate widespread predatory lending practices by some of the nation’s largest banks, including sub-prime mortgage lending, deceptive marketing, predatory and deceptive mortgage products, predatory primary and secondary mortgages, predatory and deceptive re-financings, and predatory foreclosures. Moreover, it appears that certain classes of borrowers were targeted for these predatory and deceptive mortgage products and practices, based on age, race, and income. Examples of possible predatory mortgage products include sub-prime mortgages, certain adjustable rate mortgages, and so-called “option-pay” or “option-ARM” mortgages.

In addition, there are indications that members of the financial services industry conspired to deceive regulators and the public to obtain regulatory favors, lax enforcement, and regulatory protection for schemes intended to deceive and defraud home purchasers, homeowners, regulators, and investors.

The Committee is issuing a subpoena today to Countrywide Financial in this matter because they did not provide information in response to a letter request. The Committee is prepared to issue additional subpoenas in this investigation, but will first give companies an opportunity to voluntarily comply. To aid in our investigation of these very serious issues, please provide information and records in response to the following questions, for each of the years 2000-2008:

1. Did your company operate any programs that provided enhanced benefits to certain borrowers based on their status as elite customers, persons with business or regulatory relationships with the company, friends and family of company employees and executives, or other VIP status? If so, please describe the operation of these programs, their eligibility criteria, and the benefits provided. How many people were provided with enhanced benefits under such programs? How were they notified of any enhanced benefits? For purposes of this inquiry, “enhanced benefits” means loan terms more favorable to the borrower than the loan terms then available to an ordinary member of the public, and includes any discounts or reduced costs associated with special treatment.

2. Did your company operate any program to identify loan applicants with regulatory authority over your company or the mortgage industry generally? If so, please describe the nature of the program.

3. How many residential mortgages did your company originate for each of the years 2000-2008? Of this universe, how many were: 30-years fixed rate mortgages; other fixed rate mortgages; adjustable rate mortgages; option-pay or option-ARM mortgages; sub-prime mortgages.

4. Please list by month for each year from 2000-2008 the number of residential mortgage loans on which your company foreclosed and identify the type of mortgage involved.

5. Please provide copies of all marketing strategies developed by or for your company for residential mortgages, home equity loans, or similar products for the period of 2000-2008, including all documents pertaining to the selection of target audiences.

6. Did your company coordinate with other companies to develop joint positions or campaigns against mortgage regulation? If so, identify these companies and any joint ventures, cooperative agreements, or associations that were created or used to fight regulation of mortgages.

7. Did your company develop draft regulations or legislation regarding mortgage lending that were proposed to federal or state lawmakers or regulators? If so, please provide copies of all such proposals.

The House Committee on Oversight and Government Reform is the principal oversight committee in the U.S. House of Representatives, with jurisdiction over “any matter” under Rules X and XI of the House Rules. Please deliver the requested records to the Committee on Oversight and Government Reform, room 2157 Rayburn House Office Building, no later than 12:00 noon on Friday, November 13, 2009. To facilitate delivery and review, we prefer that the records be delivered in electronic format. In responding to this request, please be advised that the terms “records” and “relating to” are defined in the attachment to this letter.

Sincerely,

Edolphus Towns

Chairman

Committee on Oversight and Government Reform

Pass the Neighborhood Preservation Act Now - Op/Ed by Albert Baldeo - Queens Chronicle

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The fallout of those crippling subprime mortgages offered by unscrupulous real estate brokers and predatory lenders has severely impacted our communities, as vacant, deteriorating properties precipitate increased fire hazards, facilitate criminal activity and depress our property values.

A recent study conducted by the Center for Responsible Lending estimated that a residential mortgage foreclosure lowers the price of other nearby single-family homes by 0.9 percent and the downward pressure on housing prices persists to houses that are sold up to two years after the foreclosure, and directly corresponds to an increase in neighborhood violent crime by approximately 6.7 percent. Homeowners living near foreclosed properties will see their property values decrease by $5,000 on average per each foreclosed home.New York City property values are likely to decline by 20-25 percent within 18 months.

The Neighborhood Preservation Act, which passed the state Senate, but is pending passage through the Assembly before it can become law, will protect neighborhood safety and mitigate the ills wrought by abandoned homes. Queens accounts for 8.8 percent of the state’s foreclosure filings this year and 34.2 percent of filings for New York City alone. Foreclosure rates in Queens, the most affected county in the state, jumped 91 percent in the first quarter of this year. As a result, the median home price in Queens dropped over $100,000 from Feb. 2007 to Feb. 2008, from $390,000 to $283,665.

This legislation will create a standard of safety and habitability for bank owned homes which are foreclosed and vacant, and empower municipalities to use their discretion in how they choose to secure and clean up these unsightly residential properties. They will be reimbursed for their work, whether by issuing violations or through legal action, or by billing the errant bank.

If this law is passed, banks can be made accountable for such conditions as inadequate security (for example, failure to provide locks and secure the premises), substantial accumulation of garbage, severe infestation of insects and rodents, graffiti and sewage leaks and spills. Hitherto, there has been a shameful lack of responsibility on the part of the banks that have destroyed the American Dream of home ownership, resulting in a decrease in our quality of life. Foreclosed properties have degenerated into havens for frequent delinquent behavior by trespassers, gangs and other criminals.

In May, 2008, the chief architect of this law, state Senator Jeff Klein, released a report which found that in New York State alone, there are 3,552,642 homes which have experienced devaluation in 2007 due to subprime foreclosures. Bleak, indeed! This act will be a much needed safety valve as we rebuild and preserve our communities, and we should all call our Assembly representatives to make it a reality.

Albert Baldeo is a community advocate and former state Senate candidate for the 15th State Senate district.

Follow-up to: Ed Towns Holds Town Hall Meeting, Answers Questions About Federal Action..

Follow-up to my recent blog posting on Congressman Ed Towns Predatory Lending Town Hall in Brooklyn this past Saturday...

FORECLOSURES FROM PREDATORY LOANS HIT BROOKLYN HARD

On Saturday, Rep. Edolphus “Ed” Towns (NY-10) hosted a town hall meeting in response to the public outcry about the prevalence of predatory lending and its impacts on Brooklyn communities. Adding to the financial crisis, predatory lenders have targeted elderly, minority, and financially inexperienced borrowers, disrupting families and destroying communities all across the country. In Brooklyn, the problem has manifested in many ways, including the high rate of foreclosures and the lack of affordable housing.

At the meeting, residents heard from Rep. Towns, Chairman of the Committee on Oversight and Government Reform, whose committee is charged with oversight of federal agencies and the stimulus package.

NYS Senate Passes Neighborhood Preservation Act Protects Property Values and Neighborhood Safety from Fallout of Foreclosure Crisis

Today Senator Jeff Klein’s bill, the Neighborhood Preservation Act, passed the NYS Senate with 47 members voting for the bill and 11 members voting against it. The legislation creates a standard of safety and habitability for bank owned homes which are foreclosed and vacant. Klein’s legislation will allow municipalities to use their discretion in how they chose to clean up these unsightly residential properties and how they choose to get reimbursed for their work whether by issuing violations or through legal action, or by simply billing the bank.

Currently, in New York State, municipalities use real property law (RPL) 235-b to craft administration codes by which to enforce the standard of safety and habitability. Real property law (RPL) 235-b establishes a standard of habitability for occupied properties between tenants and landlords. Currently, no such standard for bank owned (REO) properties exists. This standard of habitability has been considered to be breached in the State of New York if such conditions such as inadequate security (failure to provide locks and secure the premises), substantial accumulation of garbage, severe infestation of insects/rodents, and sewage leaks and spills are in evidence. Klein’s bill will provide parallel support to any codes and laws created by an individual municipality with reference to a bank owned vacant property.

“As the foreclosure crisis spreads, 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. One foreclosure can devastate an entire community and threaten the safety and well-being of innocent families We need to curtail this crisis and end the shameful lack of responsibility on the part of the banks that has permeated the American Dream of home-ownership We cannot allow our communities to become a casualties of the foreclosure crisis," said Klein.

The legislation was originally introduced in May 2008 when the fall-out of the sub-prime mortgage crisis hit home in the Throggs Neck section of the Bronx in the 34th senate district, where the ripple effect of a single foreclosure rocked a pristine and exemplary community of responsible citizens. The basement of a foreclosed property had degenerated into the site of frequent delinquent behavior by gangs of local teenagers, tormenting an otherwise quiet and family oriented neighborhood.

Unable to find any bank or agency to take responsibility for the property, the desperate community called Klein’s office for help.

In response, Klein looked up the deed of the property via the ACRIS system (the on-line records of the New York City Register) and found that it was owned by HSBC Bank as a trustee, which had sold the servicing rights to Ocwen Loan Servicing to manage the sale of the property. After countless calls, Ocwen informed Klein that eviction notices would be issued at the end of the month but that the Realtor currently responsible for the property was Northeast Assets Realty Inc. Despite repeated opposition, and an extraordinary amount of red tape to determine the party responsible for the house, Klein was finally able to arrange to have the property boarded up the next day.

“The devastation of home foreclosure effects everyone, not just the family facing the loss of their home, but the entire community. Empowering a municipality to force banks to take responsibility for foreclosed property protects property values and preserves the character of our neighborhoods ,” said Senate Majority Leader Malcolm A. Smith.

Billions of dollars continue to be drained from the tax base, and New York neighborhoods are feeling the effects of the foreclosure crisis firsthand as homes fall into disrepair, attract trespassers and illegal activity. As of October 2008, there were 23,093 houses in the foreclosure process in NYC, with 9,297 in Queens, 7,816 in Brooklyn, 2,682 in the Bronx, 2,296 in Staten Island and 1,002 in Manhattan. Queens accounts for 8.8% of the state's foreclosure filings this year and 34.2% of filing for New York City.

In addition, according to PropertyShark, foreclosure rates in Queens (the most afflicted county in the state) jumped 91% in the first quarter of this year. As a result, the median home price in Queens plummeted over $100,000 from Feb 2007 to Feb 2008, from $390,000 to $283,665.

According to the Center for Responsible Lending , bank owned properties not only drag down property values, but directly correspond to an increase in neighborhood violent crime by approximately 6.7%. Homeowners living near foreclosed properties will see their property values decrease by $5,000 on average per each foreclosed home. Whereas foreclosure rates for the entire city jumped 60% in the third quarter of 2008, New York City property values overall are likely to decline by 20-25% in the next 12 to 18 months.

In May, 2008 Klein released a report which found that in New York State alone, there are 3,552,642 homes which have experienced devaluation in 2007 due to sub-prime foreclosures. The resulting combined monetary decrease in home values/tax base in New York State is $36.841 billion dollars. As of October, 2008 there were a total of 1,954 bank owned properties in NYC, with 1,209 in Queens, 313 in Brooklyn, 160 in the Bronx, and 17 in Manhattan. Kings County (Brooklyn) ranks 3rd in the first in the United States but 1st in the NY Metro region with 740,141 neighboring homes devalued at a total cost to the tax base of $12.743 billion. Queens County is a close contender at 5th place (411,929/$9,254 billion), followed by Bronx County at 7th (398,746/$4.903 billion), New York County at 10th (398,746/$3.845 billion), and finally Richmond County at 33rd (141,174/$1.086 billion). Klein’s report also surveyed Nassau and Westchester county. In Nassau county there were 911 REO owned properties with 271,875 neighboring homes devalued due to foreclosure. There a was a combined $1.935 billion dollar decrease in home values/tax base from the foreclosure effect. In Westchester County there were a total of 209 REO owned properties with 176,387 neighboring homes devalued due to foreclosure. There was a combined $1.3 billion dollar decrease in home values/tax base from the foreclosure effect.

“It is sad that many of the same lending institutions that gladly took taxpayer money to buy new drapes and take lavish trips to Las Vegas have to have their arms twisted to be a good neighbor,” Senator Craig M. Johnson, (D-Port Washington), said. “I commend Senator Klein for authoring this common-sense legislation and for leading the fight to hold these lending institutions accountable, and to preserve the quality and character of our neighborhoods,” said Senator Craig M. Johnson (D-Port Washington)

"I want to applaud Senator Klein for leading the fight to get such common sense legislation passed," said Senator Krueger. "When a house is foreclosed upon, for whatever reason, it is incumbent upon the bank or the financial institution to take responsibility for being a good neighbor and keeping the home in good repair. Otherwise, the entire community suffers,” added Senator Liz Krueger (D-Manhattan).

"A foreclosed property that falls into disrepair can have devastating ripple effects for the surrounding community," said State Senator Eric Schneiderman (D-Manhattan/Bronx). "I am confident that this bill, by holding the banks accountable for maintaining their properties, will go a long way to protect the quality of life for the residents of impacted neighborhoods throughout the state,” added Senator Eric Schneiderman (D-Manhattan).

“When a home is foreclosed on, banks take ownership but they don't take responsibility, and it takes a toll on the community,” added Klein.

Nonprofit 'Common Law' Trains Homeowners to Be Their Own Lawyers by Rachel Monahan - NY Daily News

Read original...

When Nathaniel Hill couldn't make his $4,189 a month mortgage payments for his two-family East New York home, he needed help to fight off foreclosure.

[Photo caption: The nonprofit group runs legal clinics for homeowners in Assemblyman Darryl Towns' East New York office. Maisel/News]

In June he turned to Legal Services, which has been overwhelmed with city residents facing foreclosure. A private lawyer cost too much and free attorneys didn't file court papers.

So Hill, 40, a limo driver, is taking on the bank himself in court, one of about 50 homeowners facing foreclosure being trained by a nonprofit group, Common Law, to be their own lawyers.

"I tried Legal Services....I tried everybody," said Hill. "This was my first home. It was my dream, my goal."

The city's growing foreclosure crisis has outstripped pro bono and government-subsidized lawyers' ability to handle the problem, advocates said.

"There are thousands of people out there who might be in need of legal assistance, and we just don't have the capacity," said South Brooklyn Legal Services foreclosure unit director Jessica Attie.

Legal Services had so many foreclosure cases last year it had to stop taking new ones, she said. The group has now expanded its foreclosure unit. But even with an enlarged foreclosure practice, they can only take a fraction of the cases, Attie said.

There is one more complication to finding free legal assistance for homeowners in trouble.

Pro bono lawyers from elite city law firms are also not much help to homeowners facing foreclosures: Many of the firms represent the banks that are trying to take their homes.

Since April, Common Law has been running the legal clinics for homeowners every Tuesday night out of Assemblyman Darryl Towns' East New York office on Jamaica Ave.

"This was a community that was seeing a renaissance until this subprime [crisis]," Towns said. "It's devastating."

With help from Common Law, Nathaniel Hill is trying to keep his home from foreclosing.

Common Law lawyers estimated that homeowners in 90% of foreclosure cases don't mount any defense.

"That's what we have been trying to tell our families, 'Don't give up so easily. Fight back,'" said United Community Centers director Ana Aguirre. Her organization has been sending homeowners to the clinic.

Besides legal advice, the clinic enlists homeowners to help each other by attending court together. Participants also share what they've learned about the complexities of the law.

Debra Singleton, who has attended the clinic, is beginning to sound like a lawyer herself. She got into trouble when an expansion of her small business Debbie's Reins & Things failed.

Facing the prospect of losing her East Flatbush house of 30 years to foreclosure, she elected to fight.

She has even found problems with her lender's case: The mortgage company failed to pay required fees to the city until after her foreclosure case was filed, she said.

"I have to do things legally. Why don't they?" she said.

An impoverished homeowner fighting off multinational banking conglomerates is far from the ideal, admitted Common Law lawyers.

Homeowners trained by the group are unlikely to make it all the way through a trial on their own. But sometimes they don't have to in order to achieve something. Banks tend to negotiate changes to loans more readily once court papers have been submitted.

"That's what we've found," said Common Law's Jay Kim. "Everyone wants to stay in their homes and wants to pay for them in a way that's sustainable."

Real Estate Roller Coaster...Are We Headed for a Steep Decline in Queens Home Values Ahead..?

Record Number of Sub-Prime mortgage foreclosures here [in Queens] Pete Davis – Queens Courier, April 5, 2007

Sub-prime mortgages are causing a dramatic spike in foreclosures throughout the city with Queens homeowners facing the most devastating effects.

Between January 1 and March 19 of this year, 1,223 foreclosure notices were filed within Queens, which puts the borough on pace to shatter the record 3,625 foreclosures that were filed last year.

Behind Foreclosures, Ruined Credit and Hopes...KAREEM FAHIM and RON NIXON New York Times, March 28, 2007

Neighborhoods in Queens...also have large concentrations of sub-prime loans which are at high risk of foreclosure...The study by the Center for Responsible Lending predicts that nearly 22 percent of the sub-prime loans in New York area made in 2006 will go into foreclosure in the next few years, one of the highest rates in the nation.

Queens Crap:

The Daily News has an excellent series of maps showing exactly where the sub-prime mortgage victims are likely to be.

Set-up for a Fall...Sub-prime mortgages lead to record foreclosures in the city's poorest nabes...Juan Gonzalez - Daily News, March 28^th, 2007

In some areas of South Jamaica and Bedford-Stuyvesant, as many as 10 homes per block faced foreclosure last year.

The Reason: sub-prime mortgages offered by unscrupulous real estate brokers and predatory lenders, according to a study on the epidemic if citywide foreclosures

Plans to stem foreclosures...Schumer working on laws to protect against predatory lending, Sid Cassese, Newsday, April 3, 2007

Help against predatory mortgage brokers could be just around the corner, according to Sen. Charles Schumer, (D-N.Y.), who says such aid would not only benefit the borrower but also those who own homes near foreclosed houses.

Schumer, who heads the Senate banking subcommittee on housing, told an audience in Massapequa yesterday that he and others in Washington are working on legislation to regulate mortgage brokers for the first time and to end loans offer based on false promises.

The Real Estate Roller Coaster...from 1890 – 2007...

http://www.speculativebubble.com/videos/real-estate-roller-coaster.php