State fights foreclosures in Qns.

Chhaya Director Seema Agnani (l.-r.), city Housing Department official Michael Abel and Chhaya Program Director Afreem Alam, shown in this file photo, announce a new homebuyer assistance program. Chhaya is one of four Queens nonprofits to receive new funding to help homeowners avoid foreclosure.
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Four Queens nonprofits will receive a share of more than $16 million the state attorney general’s office has set aside this year to assist homeowners in avoiding foreclosure, though it was not certain whether the grants would allow the groups to expand their services or simply compensate for other sources of funding that have run dry.

Attorney General Eric Schneiderman announced last week that the Queens Volunteer Lawyers Project in Jamaica, Queens Legal Services, the Chhaya Community Development Corp. and Neighborhood Housing Services of Jamaica would be among the 94 legal-service and housing-counseling providers across the state to receive the grants, which represent the first year of his office’s three-year, $60 million program to aid struggling homeowners.

In February, Schneiderman and 48 other state attorneys general reached a $25 billion settlement with Ally Financial (formerly GMAC), Bank of America, Citi, JPMorgan Chase and Wells Fargo after a joint federal-state investigation found the country’s five largest mortgage servicers had improperly signed off on foreclosures between 2008 and 2012.

As the foreclosure crisis heated up, New York took steps — and provided funding — to help borrowers stay in their homes.

In 2008, the state Legislature passed a law that created a mandatory foreclosure-settlement conference for homeowners with subprime mortgages, designed to help them renegotiate their mortgages. As the crisis escalated, the law was expanded in 2009 to include all borrowers facing foreclosure.

The state’s budget for 2008-09 provided $25 million in grants to nonprofits that assisted homeowners with foreclosure prevention services. The next year’s budget appropriated another $21.8 million under the federal American Recovery and Reinvestment Act. Those contracts expired at the end of 2011.

Mark Weliky, executive director of the Queens Volunteer Lawyers Project, said starting in 2008 he used the grants to hire three lawyers, who provide legal assistance as well as training to the pro-bono lawyers.

He said the attorney general’s funding picks up where the previous grants left off.

“Just on a dollars-and-cents basis, it just about replaces the money that we’re not going to be getting,” he said.

Schneiderman acknowledged the state was facing what he called a “catastrophic lack” of legal services for low-income New Yorkers last Thursday when he spoke at one of four hearings state Chief Judge Jonathan Lippman scheduled before he reports to the Legislature on the need for more funding.

Lippman said he estimates that only 20 percent of the need for legal aid services throughout the state is currently being met.

Queens continued to lead the city in the second quarter of 2012 with 106 foreclosures, down 7 percent from a year earlier but up 31 percent from the first quarter from the beginning of the year, according to the real estate website propertyshark.com.

Sujatha Raman, director of development and communications at Chhaya Community Development Corp., said she currently has enough funding for one foreclosure counselor and would like to be able to hire another.

“We’re really hoping this will be additional funding, and not just replace existing funds,” she said.

Reach reporter Rich Bockmann by e-mail at rbockmann@cnglocal.com or by phone at 718-260-4574.

Posted 11:32 pm, October 3, 2012
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