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Homeowners delayed purposely on loans: Lancman

By Sadef Ali Kully

Queens elected officials, legal service providers and affected borough homeowners called on banks to start offering federally mandated loan modifications and stop delaying foreclosure negotiations.

Speaking outside the Queens Civil Supreme Court in Jamaica Aug. 19, Council members Rory Lancman (D-Hillcrest), I. Daneek Miller (D-St.Albans) and Dan Garodnick (D-Manhattan) said banks in New York routinely drag out the settlement conference process and flout state law by appearing at settlement conferences without the required authority to approve a loan modification that can keep a family in their home.

After the recent mortgage crisis, the federal government intervened and initiated the Home Affordable Modification Program, which requires most major banks and mortgage services to provide eligible homeowners with loan modifications.

“Banks played a substantial role in creating the foreclosure crisis and must act responsibly to help communities recover,” said Lancman.

Queens, which has the highest foreclosure rate in the five boroughs, currently has 10,000 homes in foreclosure, or one out of every 79 homes, according to the City Council Committee on Economic Development and Community Development.

Miller said southeast Queens had over 9,000 homes going into foreclosure from April 2013 to May 2015.

“To learn that city property owners may endure a settlement process that can last upwards of two years is unconscionable and this practice must stop,” Miller said.

State law requires a settlement conference to be held between the homeowner and the lender within 60 days of the initial foreclosure filing. Both parties are required to negotiate in good faith to reach a settlement. However, lenders routinely flout this law by sending employees who do not have the required documentation or who are not authorized to negotiate, Lancman said.

“There are real human consequences here, and banks should do much more to help New Yorkers avoid foreclosure and stay in their homes,” Garodnick said.

For Maria Patronas, an Astoria resident, the issue of the bank not being forthcoming during loan modification negotiations became all too real.

Patronas began falling behind on mortgage payments to Wells Fargo after repairing her home following Hurricane Sandy. She tried to obtain a modification, but was denied and then Wells Fargo filed a foreclosure action in December 2013.

“They came to my house and started taking measurements,” Patronas, a single mother, said. “They were ready to put me and my children on the street.”

Patronas looked for help with Queens Legal Services and two years later she was approved for a permanent loan modification.

Jacob Inwald, director of Foreclosure Prevention at Legal Services NYC, said despite reports of recovering real estate markets, New York remains mired in a foreclosure crisis disproportionately affecting low- and moderate-income communities of color, with foreclosure cases comprising nearly one-third of the state’s Supreme Court civil dockets across the state.

Recent data from the federal Consumer Financial Protection Bureau about consumer mortgage related complaints obtained by the American Civil Liberties Union and MFY Legal Services showed a pattern of complaints, which came from largely segregated communities across the city.

The data showed that 35 percent of the complaints came from communities with a majority of black, Latino and Asian residents, which included 11 percent of the complaints from hyper-segregated communities with almost 90 percent of population is made up of black, Latino or Asian families.

Reach Reporter Sadef Ali Kully by e-mail at skully@cnglocal.com or by phone at (718) 260–4546.