Mayor Touts Plan To Prevent Foreclosures

Mayor Michael R. Bloomberg has announced a new public campaign to encourage more New Yorkers to get the free legal assistance, mortgage counseling and education services that are available through the Center for NYC Neighborhood network of providers.

While the program has been effective for those who have taken advantage of it, the mayor's office, many New Yorkers who have suffered foreclosure filings have not sought the free help. The campaign will urge New Yorkers to call 311 and will highlight the confidentiality of the services.

Mayor Bloomberg made the announcement, at Legal Aid Society Queens Neighborhood Office in Kew Gardens, and was joined by Council Member Thomas White Jr., Department of Housing Preservation and Development (HPD) Commissioner Rafael E. Cestero, Center for NYC Neighborhoods Executive Director Michael Hickey, Philadelhpia Mayor Michael A. Nutter and N.Y. ACORN President Pat Boone.

"More than 18 months ago, we established the Center for NYC Neighborhoods to provide New Yorkers with the legal, technical and financial assistance needed to decrease the risk of home foreclosures," said Mayor Bloomberg. "The Center has proven effective, but we want more New Yorkers to take advantage of it. For the 12 months ending in March, more than 13,000 homes in our City were reported at risk of foreclosure. Many of them are eligible for loan modifications and refinances but either don't know it or don't have the help they need to negotiate with their banks.

"Our new public campaign addresses fear, confusion and frustration that the threat of foreclosure can bring by promoting free, confidential, one-on-one assistance," he continued. "While we want to link distressed homeowners to counselors, but we also have to do more to bring lenders to the table. A strengthened settlement conference process between lenders and homeowners would mean more modifications and faster resolutions for homeowners."

Bloomberg and City Council Speaker Christine Quinn reportedly created the Center for NYC Neighborhoods in December 2007. It has distributed grants to more than 30 nonprofit service providers to help homeowners at risk of mortgage foreclosure throughout the five boroughs. From July 2008 through March 2009, Center for NYC Neighborhood partner organizations provided foreclosure prevention services to 1,900 people.

The city and City Council provided $2.8 million for the first year of operation of the Center, which relies heavily on private donations for ongoing operations and grants. The city recently committed an additional $2 million to support the Center, and the Council committed $1.5 million.

The city's new campaign urges New Yorkers to call 311 to access the free services. In February 2009, the Center launched a dedicated call center that serves as the primary point of contact for all New York City homeowners in distress. When homeowners call 311, they are transferred to the call center which conducts intake interviews and connects homeowners to free expert counseling services in their neighborhood.

In addition to traditional, targeted media placements, including subway, bus and bus shelter placements, campaign materials will be distributed to churches, local stores and individual homes and buildings in the most affected neighborhoods, including Jamaica, Queens, the Northwest Bronx, the North Shore of Staten Island and Central Brooklyn. The materials will be in both English and Spanish.

"With Southeast Queens being at the epicenter of the city's foreclosure crisis and with unscrupulous foreclosure rescue scam artists preying upon families and individuals who are in dire situations, the Center for NYC Neighborhoods has been providing free foreclosure legal and counseling services to hundreds, of families and homeowners throughout my district," said Council Member White.

"Foreclosure is bad for homeowners, bad for lenders and bad for neighborhoods," said HPD Commissioner Cestero. "Our goal is to keep families in their homes, support those in transition and preserve and stabilize neighborhoods. There are many ways to do this, and we are exploring every option."

Current New York State law provides homeowners in foreclosure an opportunity to negotiate loan modifications with their lender through a settlement conference. To date, fewer than half of the homeowners in foreclosure have taken advantage of the opportunity, and few loan modifications have been achieved. Notices from lenders about settlement meetings are often difficult to understand and get treated as junk mail. Further contributing to the problem is that occasionally representatives sent by lenders to the meetings are not authorized to approve modified loans.

The program piloted in Philadelphia ensures homeowner notifications about mediation are clear and understandable, gives representatives of lenders in settlement meetings the power to modify loans, and links distressed homeowners with housing counselors. As a result, as many as 80 percent of households eligible for mandatory settlement in Philadelphia have appeared at their conference, and to date 1,200 households, or 35 percent of those who showed up, have reached a settlement. Another 1,500 households are in negotiation.

Mayor Bloomberg also urged participating loan servicers and banks to make sure to determine whether homeowners are eligible for the federal Making Home Affordable program prior to initiating foreclosure actions. Economists at the Federal Reserve Bank of New York estimate that between 500,000 and 600,000 loans in New York City may meet the criteria for loan modification under the Making Homes Affordable plan, with homeowners that pay more than about a third of their income toward monthly payments able to qualify for help.

The city's Five Borough Economic Opportunity Plan is a comprehensive strategy to bring New York City through the current economic downturn as fast as possible. It focuses on three major areas: creating jobs for New Yorkers today, implementing a long-term vision for growing the city's economy, and building affordable, attractive neighborhoods in every borough.

To learn more about the plan, visit nyc.gov.