City Comptroller John Liu is leading a coalition of government, civic and religious leaders in a charge to implore banks to change their practices in order to help stem the rising foreclosure crisis wreaking havoc on the New York economy.
The group of leaders, which includes representatives from the Queens neighborhoods with the most homes in foreclosure, signed on to a letter urging big banks to change their mortgage modification practices.
“Unresponsive staff, misinformation and repeated requests for paperwork — the red tape and bureaucracy New Yorkers often cite as they struggle to save their homes — are symptoms of a system that lacks incentives for banks to take action and find solutions,” Liu said. “It’s time to engage in identifying the best practices and solutions.”
Liu sent a first letter backed by a smaller coalition in July to some of the country’s largest banks, encouraging them to amend their mortgage modification practices in order to better serve customers who have fallen victim to variable-rate and other mortgages, which have left many people struggling with crushing debt.
He sent out a second letter earlier this month signed by all five borough presidents, city Public Advocate Bill de Blasio, City Council Speaker Christine Quinn (D-Manhattan), 24 Council members, 33 state Assembly members, 12 state senators, U.S. Rep. Gregory Meeks (D-Jamaica) and 53 clergy leaders. The letter again implored Bank of America, Citibank, HSBC, JP Morgan Chase and Wells Fargo to step up efforts to help homeowners.
“Federal efforts are falling short. Neil Barofsky, special inspector general for the Troubled Asset Relief Program, recently testified that fewer than 400,000 homeowners have had their mortgages modified, just a small percentage of the millions of borrowers who were supposed to get help from the federal program,” the letter said. “In light of these conditions, we urge [insert bank name] to do more to help struggling homeowners modify their loans.”
In the first quarter of 2010, more than 4,200 homes were foreclosed in New York City — many in Queens. That number is up 16.3 percent from last year. Southeast Queens neighborhoods such as Jamaica, St. Albans and Springfield Gardens lead the state in the number of foreclosures.
State Assemblyman William Scarborough (D-St. Albans) supports the measure, saying that people in his district have not been getting enough help from banks to get through the mortgage crisis.
“A lot of these banks got bailouts, they got taxpayer money, and the assumption was that they would be flexible, they would be amenable to allowing people to modify their mortgages and that this would ease the rate of foreclosures and help people remain in their homes,” he said. “The banks by and large have been very rigid and not very forthcoming in utilizing the mortgage modification program, and it’s keeping the rate of foreclosures high, especially in our community.”
Liu held a workshop Monday night at Queensborough Community College in Bayside on homeownership, going over topics including first-time home buying, homeowner assistance and co-op owner assistance.
Councilman Peter Koo (R-Flushing), state Sen. Jose Peralta (D-Jackson Heights), Assemblyman David Weprin (D-Little Neck) and a representative for Councilman Mark Weprin (D-Oakland Gardens) also attended the event.
Reach reporter Connor Adams Sheets by e-mail at csheets@cn