New York, NY – October 30, 2008 – (RealEstateRama) — New York Superintendent of Banks, Richard H. Neiman, in a speech today at the Rural Housing Coalition Conference in Buffalo, identified upstate communities among the hardest hit by foreclosures and highlighted the comprehensive approach taken by the state in combating this housing crisis.
The Superintendent noted that while New York ranked 37th among the fifty states for foreclosures, on the local level the problem is more pronounced. Entire neighborhoods in New York City and Long Island are at risk of becoming destabilized, and smaller cities are also deeply affected. “The foreclosure crisis is not just a New York City or a downstate problem – there are pockets across the state being disproportionately impacted,” said Superintendent Neiman. “The latest statistics show that upstate a number of regions continue to be among the top 100 areas for foreclosures in the entire country.”
RealtyTrac data for the third quarter of 2008 indicates that the following five metropolitan statistical areas in upstate New York continue to be among the 100 areas most affected by foreclosures: Poughkeepsie/Newburgh/Middletown; Buffalo/Cheektowaga/Tonawanda; Rochester; Albany/Schenectady/Troy; and Syracuse.
“Even though New York overall is not one of the states hardest hit, the inclusion of these upstate cities and surrounding areas on a national list should be a final wake-up call. No one is immune from the effects of the current financial turmoil – it’s not ‘someone else’s problem.’” Neiman stressed, “We need to continue investing serious energy and resources in fighting this foreclosure crisis across the state.”
The Superintendent’s remarks covered the comprehensive approach taken by New York in response, both to help existing borrowers and to help ensure a similar housing crisis never happens again. The state has taken decisive action through direct consumer outreach, enhanced enforcement efforts, and substantial grants for consumer counseling and legal aid services. Governor Paterson’s new mortgage legislation is the centerpiece of this effort, and provides critical protections such as a pre-foreclosure notice and a mandatory settlement conference, to provide additional opportunities for foreclosure alternatives.
Identifying the relative lack of traditional bank branches in many communities as one of the contributing factors to the current housing crisis, Neiman says, ”We’re addressing that, by creating incentives for banks to open branches in underserved areas upstate and by involving community stakeholders in developing local solutions that work. Our economic inclusion initiatives complement the state’s other anti-predatory lending efforts.”
Superintendent Neiman described the Department’s Banking Development District (BDD) program and involvement in the Alliance for Economic Inclusion (AEI) pilot in Rochester as good models for local renewal. Through the BDD program, the New York State and New York City Comptrollers place deposits at below-market interest rates at approved branches in locations determined to be underserved by the Banking Department. The AEI is the Federal Deposit Insurance Corporation’s (FDIC) program for expanding access to traditional financial services through innovative partnerships with community groups, industry leaders, and government officials. Rochester is the first location in New York chosen for the program.
“The Department’s partnership with the FDIC in the economic inclusion pilot in Rochester is another strong example of the results that can be achieved by creative state-federal cooperation through the dual banking system,” said Neiman. “I expect that there will be results from the Rochester pilot that could be replicated in smaller communities across the state. We need to expand access to physical bank branches, but just as importantly we need the right mix of products and services to meet diverse needs. The AEI pilot involves the community in designing these solutions and developing local infrastructure for sustainable results.”
The Superintendent noted that a housing crisis of this magnitude requires the involvement of the federal government, in addition to bold action at the state level. “I applaud the FDIC for taking a creative approach to loss mitigation and encourage the Treasury Department to likewise use its new authority to facilitate systemic modifications, through loan guarantees and credit enhancements,” said the Superintendent.
The full text of the Superintendent’s speech is available on the Banking Department’s Web site at www.banking.state.ny.us.sp081030a.htm.
TheNew York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $2.28 trillion.
In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.banking.state.ny.us.
