Senators Stewart-cousins And Klein Sponsor Public Forum On Predatory Lending
Westchester has jumped 44 percent in the first quarter of 2007. Homeowners looking for a helping hand have ended up with a nightmare. Our office has received complaints regarding the outrageous, horrific and unscrupulous practices of some mortgage lenders. This forum will help draw attention to these lenders and educate homeowners, so they don’t get taken to the cleaners,” stated Senator Stewart-Cousins.
In the second of several state wide public hearings on predatory lending practices, which have exploded across the Metro area causing thousands to loose their homes, Senator Andrea Stewart-Cousins (D-Yonkers) and Senator Jeff Klein (D-Bronx/Westchester) were joined by their colleague Senator Diane Savino (D-Staten Island/Brooklyn); Richard Neiman, Superintendent of the New York State Department of Banking; Lorraine Cortés-Vázquez, New York Secretary of State; Michael D. Mitchell, Esq., Vice President of Fair Lending at the National Community Reinvestment Coalition; Tim Idoni, Westchester County Clerk to hear testimony from a variety of witnesses including; Samuel Bornstein, Professor of Accounting at Keane University, Westchester County Legislator Lois Bronz, mortgage brokers and victims of predatory lending practices among others.
Sub-prime loans are loans offered to individuals whose credit history prevents them from securing a low-rate loan. A typical sub-prime borrower has a low credit score and a history of late payments, charge-offs or bankruptcies. Since they are considered at high risk of default, they receive less-than favorable terms, including higher interest rates, regular fees or an upfront charge.
In some cases, sub-prime borrowers are drawn in by a low introductory rate, which then sharply increases within a few years, making it difficult if not impossible to keep up with monthly payments. Unless they can refinance their loan or sell the house, the borrower can lose their home to foreclosure.
Residents and victims testified at the forum to the horrific practices that have stripped them of their equity and dreams such as, “packing” which refers to the practice of packing on excessive fees such as pre-payments and high penalties, “loan flipping”, in which a broker refinances the loan every two years at an increasing rate resulting in a downward spiral of debt and hidden balloon rates.
HALT Task Force, created in March, to address the crisis in the sub-prime mortgage market.
Today’s hearings will help determine future legislation, which will be crafted in the 2008 legislative session.
Staten Island, due to lowered interest rates and tax abatement programs, rates for first time homebuyers have skyrocketed over the last ten years, the highest in history.The bad news is that far too many are victims of predatory lenders who