Lawmakers Look To Crack Down On Lenders Preying On Vulnerable New Yorkers
With more and more New Yorkers facing foreclosure, state lawmakers are looking to crackdown on "predatory lenders," who are offering a bait-and-switch kind of mortgage to low- and moderate income New Yorkers. NY1's Lindley Pless filed the following Money Matters report.
The idea of moving back into a homeless shelter with her four children is more than Helen Ryce-Lyles can take.
“I can't sleep worrying about my children and where we are going to be at. I can't go back in that shelter,” says Ryce-Lyles.
A few months back an agent from Queens realty company Metropolitan Homes approached Ryce-Lyles and promised her with their help she could buy her own house. That's when she moved from a shelter to her home on Brabant Street on Staten Island.
“He said it’s no money down, no credit check, and affordable housing,” says Ryce-Lyles.
She says the broker drove her to the house, and helped her apply for $10,000 in government down-payment assistance. They told her monthly payments would be about $1,990.
“I said, that's great because I receive from social security $3,200 a month,” says Ryce-Lyles.
She soon realized she was duped into signing up for two mortgages, and the joint monthly mortgage payment was $3,745 a month. She quickly accrued $13,000 in back payments.
Ryce-Lyles says she was shocked to find out that the person she thought was the cosigner was in fact the owner of the house she bought.
“He’s the owner! They tricked us. All that paperwork signed – I mean you’re signing your life away,” says Ryce-Lyles.
State Senator Diane Savino says she's on a mission to help people like Helen.
“We are working with the Attorney General's office to do some investigations in some of these fraudulent brokers and we are going to be pursuing them through the criminal justice system,” says Savino.
In fact, Ryce-Lyles has been one of many witnesses to testify at hearings like this one which Savino has held in recent months to draw attention to the issue of predatory lending.
“We were mostly looking to talk to reputable people in the industry, so that they could make either regulatory recommendations or legislative recommendations so that we could to prevent this from happening in the future,” says Savino.
The Senator says that unless we act now, more and more misinformed homeowners may, like Ryce-Lyles be facing foreclosure in the future.
She's calling on those who say they've been tricked to bring their cases into the light by contacting local politicians for help.
“It's better to be embarrassed and ask for help than lose you home, because once it is gone you cannot get it back,” says Savino.