From The Desk Of Senator Craig M. Johnson
Unfortunately, their strategy to stave off a looming epidemic of foreclosures that will affect millions of families and damage our economy is akin to using a Band-Aid to cover a gunshot wound.
Current estimates show that the Bush plan would – at best – help only 12 percent of the estimated 2 million sub prime borrowers that are staring in the face of foreclosure.
This issue is of particular importance to Long Island, where a recent report from the Senate Democratic Conference shows that a staggering 22 percent of sub prime mortgages issued in 2005 are headed toward foreclosure. These figures put the Island on course to have the highest rate of foreclosure in New York state and the 15th highest in the country.
If left unchecked, this problem will only get worse. An analysis by Newsday shows that nearly a third of the 107,000 mortgages originated on Long Island last year were sub prime loans, which are mortgages that banks issue to “high risk” borrowers, often with low teaser rates that within a few years balloon to much higher rates.
The Senate Democrats last Spring unveiled a comprehensive plan to tackle the sub prime crisis. This package included a much more inclusive freeze on rate adjustments, along with legislation that would provide free financial literacy programs for borrowers, and make banks who engage in predatory lending practices ineligible to conduct business with the state.
Unfortunately, the Senate Majority has not seen fit to bring these bills to a vote. They also have not offered their own legislation to address this problem, nor have they shown any sign that dealing with this crisis is a priority for them.
Doing what we can to make constituents' lives better should be the top priority of any elected official. Helping people keep their homes, I would say, falls within this category.
My conference will be reintroducing a revised sub prime plan this upcoming legislative session. This package will reflect the findings of a series of public hearings that my colleague, Senate Deputy Democratic Leader Jeff Klein, held this summer. I, along with Assemblyman Tom Alfano, hosted one such hearing in Elmont.
I heard first-hand the pain and the suffering from those about to lose their homes as they struggle to meet the terms of an unfair loan that seems to have been designed for default.
These people deserve better than what the Bush White House is offering them.
I pledge to continue to fight to make sure that they receive what they are due.