State Senator Shirley Huntley (D-Jamaica) said predatory loans are causing too many residents of her district to lose their homes and action must be taken to curb the practice during a forum last week to address the issue at York College.
"I can tell you that in the next year more than half the houses in southeast Queens will be foreclosed if something doesn't happen," Huntley said. "This is something that really affects the people of my district."
Predatory lending "refers to a group of practices that are really designed to relieve people of the equity in their homes," said Mark Winston Griffith of the Neighborhood Economic Development Advocacy Project (NEDAP) "What we've seen is that people across the board are receiving these products irregardless of their credit history, irregardless of their income."
The loans are generally pitched to prospective homeowners who cannot get a mortgage elsewhere and have terms that may look affordable at first glance but are unmanageable.
A handout prepared by NEDAP used green dots to show the number of high-cost refinance loans made in Queens and red dots to depict one-year foreclosure patterns in the borough.
A majority of the dots were in southeast Queens, an area that has more blacks and Hispanics than it does whites.
Griffith said predatory lending "is occurring primarily in neighborhoods of color. ...There is certainly a racial dynamic to it."
But despite the prominence of predatory lending, not much can be done to prosecute it, according to Gregory Pavlides, the Bureau Chief of the Queens DA's Economic Crimes Bureau.
"It is often difficult to sustain a criminal case against a... predatory lender," he said, because having an unfair mortgage is not a crime. The DA's office would need "fraudulent inducement" to prosecute such lenders.
Pavlides urged victims of predatory loans to keep every signed piece of paper from their lender.
"If they're not giving you the document, something's going on," he said.
Lendees should ask to have terms of their mortgage explained to them if they don't understand, said Pavlides, who also told the crowd to watch out for an attorney who represents both sides of a real estate transaction.
"Most important, use common sense," he said.
Carmen Martinez, the Director of NYC Comptroller William Thompson's Community Action Center, which runs a foreclosure prevention hot line, said the line has received 650 calls since it opened last month.
About 155 to 160 of the calls have come from Queens, the most of any borough.
Martinez said the hot line's staff was able to save the home of a Queens resident, which was two weeks away from being auctioned off.
But Griffith said more needs to be done to fund groups that aid victims of predatory lending and increase awareness of the practice instead of putting resources into help lines and task forces.
Reach reporter Howard Koplowitz by e-mail at email@example.com or by phone at 718-229-0300 Ext. 173.