Electeds Take On Subprime Crisis

Shirley L. Huntley

February 14, 2008

Editorial feature in The Times Ledger
By Ivan Pereira

Leaders from all levels of government announced this week that they will be taking on the growing subprime mortgage and foreclosure crisis that has hit thousands of residents in Queens.

State Sen. Malcolm Smith (D-St. Albans) and U.S. Rep. Carolyn Maloney (D-Astoria) both spearheaded new campaigns that brought all parties - homeowners, community activists and banking corporations - together to find a solution. On Sunday, Smith joined state Sen. John Sabini (D-Jackson Heights) and other senate Democrats at a news conference to announce Operation Protect Your Home. 

The four-week initiative brings area leaders from the state Senate and City Council along with members of the state Banking Department directly to homeowners within their own borough in a special town hall-style forum.

Smith said the meetings would "provide families with enough help and information to get back on solid footing to keep their homes," in a statement.

The Queens forum will take place March 1 at York College from noon to 8 p.m. Smith will be host and state Sens. Sabini, Shirley Huntley (D-Jamaica), George Onorato (D- Long Island City), and Toby Stavisky (D-Whitestone) are expected to participate, too. For more information call 718-528-4290.

On Monday, Maloney initiated her own campaign against the crisis at City Hall. The congresswoman, along with U.S. Rep. Nydia Velazquez (D-Brooklyn) and U.S. Rep. Gregory Meeks (D-Jamaica) held a congressional field hearing in the Council's chambers to get insight from various sectors involved in the crisis on how to help homeowners.

"We are facing a subprime tsunami," Maloney said. "We need to focus on practical solutions to keep struggling New Yorkers from losing their homes."

Nearly 20,000 families had their homes foreclosed in the city in the last three months, according to Maloney. Meeks and Velazquez said they were disturbed with the fact that the hardest hit neighborhoods were located in predominantly lower-middle class neighborhoods and minority neighborhoods like Jamaica and St. Albans.

"These are astronomical figures, but when I see the faces on my constituents, I see something more horrible. I see the loss of the American dream," Meeks said.

City Councilman Erik Dilan (D-Brooklyn) began the meeting by telling the House members that the best way to help homeowners was to provide support early. Dilan advised the committee to make subprime lenders and agencies provide mandatory counseling to borrowers.

"We have to enact laws like this and others that will regulate the industry," he said.

Jane Azia, the director of consumer affairs for the state Banking Department, concurred and told Maloney that there should be more emphasis from the federal government to allow financial institutions to provide more loan modifications. 

"The refinance option has nearly evaporated," she said.

Kieran Quinn, the chairman of the Mortgage Bankers Association, claimed major lending corporations are doing their part by offering a hotline, 1-888-995-HOPE, to help borrowers get help on voluntary loan modification. Josh Zinner, the co-director of Neighborhood Economic Development Advocacy Project, criticized Quinn and the association for asking victims to find help instead of giving it to them from the beginning.

"We've seen time and time again that we can't rely on the voluntary mortgage modification. Too many people don't know where to get help or how to get it," he said.

The congressional members agreed and said the House and Senate are considering several bills to reform and regulate the subprime industry. One of the bills is the Mortgage Reform and Anti-Predatory Act, which would create a licensing system for loan originators and establish a minimum standard requiring borrowers have a reasonable ability to repay a loan.

"We need to stop the house of cards from falling," Maloney said.