October 30, 2007 — Flanked by several of the city’s top labor and religious leaders, New York City Comptroller William C. Thompson, Jr. today launched a citywide “Save Our Homes” initiative designed to help homeowners hold onto their homes amid the nation’s worsening subprime crisis.
“Foreclosure rates from subprime mortgages are reaching staggering rates,” Thompson said. “It is estimated that approximately 15,000 families in the City are at risk of losing their homes by the end of this year and experts predict this number to increase significantly in 2008. These pending foreclosures not only will close the doors of homes and opportunities for thousands of New Yorkers, but will adversely impact our neighborhoods as a whole.”
In an effort to help stem the tide of this growing problem, Thompson is launching “Save Our Homes” starting in November to work with labor, clergy and neighborhood organizations to highlight the crisis and offer assistance to New Yorkers. The events will officially begin on November 4.
“We plan to highlight the issue and distribute a prevention guide in churches identifying ways to prevent foreclosure and listing vital resources for people in their neighborhoods, in the city, and in the state,” Thompson said. “There is an urgent need for this crisis to be rapidly addressed at many levels, because this affects every one of us, if not a family member than a friend or a neighbor.”
Thompson’s office is coordinating with clergy to distribute thousands of the Foreclosure Prevention Guides across the city, particularly in communities that have been seriously affected by the subprime crisis.
“Throughout the scriptures, provision and protection of homes is a top priority. The preservation of homes for New Yorkers should also be a top priority for government, community and religious leaders,” said Paul de Vries, President of the New York Divinity School.
“It seems as though the American Dream has now become the American Nightmare. Mortgage defaults and foreclosures in every major city across the country have skyrocketed over the past year as homeowners buckle under the weight of rising costs and a downturn in the housing market associated with unscrupulous and predatory subprime lending practices,” said Gary La Barbera, President of the New York City Central Labor Council. “These grim statistics underscore the urgent need for immediate action to protect homeowners from literally losing the roof over their heads. The Central Labor Council is proud to partner with Comptroller Thompson on the ‘Save Our Homes’ action plan to help New York’s working families save their homes.”
“Thousands of hardworking families across New York City are in jeopardy of losing their homes because of rising foreclosure rates from subprime mortgages. Before the roof completely caves in on homeowners, we must help offer better options and resources if they are to avoid becoming victims of subprime lending. I am proud to stand beside New York City Comptroller William C. Thompson, Jr., as he leads the fight to save our homes,” said Greg Floyd, President of Teamsters Local 237.
“I have met with many homeowners who are facing pre-payment penalties, rate adjustments and foreclosures because of the inappropriate subprime instruments. I am proud to stand here with the Comptroller who is taking action to provide these homeowners with options and alternatives as well as to stand up for them when illegal practices have been at play,” said Rev. Edwin C. Reed, Pastor, Morris Brown AME Church and Chief Executive Officer, Greater Allen Development Corporation. “These victimized homeowners are in our churches and communities and without aggressive action, whole neighborhoods will be devastated. I am glad to partner with Comptroller Thompson as active participants in easing the burdens of the residents of southeast Queens and the metropolitan New York area. The fear, pain and loss are real and the solutions must be forthcoming immediately.”
“As a union with our own housing program we have seen an uncomfortable level of foreclosures over the last year – lenders must be held accountable, government must intervene so that the rates of these foreclosures don’t continue to escalate and consumers should be aware and educated about the pitfalls – Comptroller Thomas’s efforts are to be applauded,” said District Council 37 Executive Director Lillian Roberts.
“The foreclosure crisis is hitting all of our members and non-union working families,” said Edgar Romney, Executive Vice President of UNITE HERE. “We cannot walk away from our communities. We are proud to stand with Comptroller Thompson and join him in the effort to help at-risk homeowners avoid foreclosure.”
“Thousands of city families already face losing their homes because of the crisis created by subprime lending,” said Stuart Appelbaum, President of RWDSU/UFCW. “That number is expected to increase dramatically next year. If we act now we can help many of these families stave off such a catastrophe. The education and assistance offered through the ‘Save Our Homes’ initiative is an important step in helping those facing foreclosure and eviction.”
“Foreclosures on subprime mortgages are at a staggering rate in this state and unfortunately are affecting some of the hardest working New Yorkers,” said John R. Durso, President of Local 338 RWDSU/UFCW. “While subprime lending enables borrowers with poor credit to buy new homes or improve their current homes, it also leads to predatory lending putting more families at risk of foreclosure, thereby destabilizing our communities. Subprime lending is a serious concern of organized labor, and we thank the Comptroller for taking the lead with the ‘Save Our Homes’ effort.”
“Buying a home is, for many of us, the pinnacle of the ‘American Dream’, achievable only through years of hard work and saving,” said Ernest Logan, President of the Council of School Supervisors and Administrators. “Unfortunately, some New Yorkers were lured into bad situations that have left them struggling. CSA supports ‘Save Our Homes’ because it is important to reach those homeowners before they fall too far behind. They are our neighbors and our colleagues, and it is in everyone’s best interest to get the help and support they need.”
On April 26, Thompson launched a Foreclosure Prevention Helpline – at (212) 669-4600 – to help New Yorkers combat foreclosure. The Helpline has since received 1,956 calls from New Yorkers – and others from the broader tri-state region – struggling to hold onto their homes and cut costs. The Helpline links callers with United States Department of Housing and Urban Development certified counselors in specific neighborhoods. Comptroller’s staff then monitors each case to ensure help is provided.
“This Helpline connects those in need with various organizations with an expertise in banking and housing. I encourage any homeowner confronted with swelling bills and a diminishing ability to pay to call my office,” Thompson said. “We are here to help.”
Calls primarily have come from the City, although staffers with Thompson’s Community Action Center have fielded inquiries from New Jersey, Connecticut and even Florida. Most calls – about 41 percent – are from Queens, about 34 percent from Brooklyn, 13 percent from Staten Island, 10 percent from the Bronx, and two percent from Manhattan.
All signs point to a worsening of the subprime crisis and its impact on New York City. According to the Neighborhood Economic Development Advocacy Project (NEDAP), New York City lis pendens filings (the formal notices that start the foreclosure process) have steadily risen over the last four years – from 6,685 citywide in 2004 to 11,029 in 2007 (as of October 15). That number is expected to near14,000 by year’s end.
Thompson pointed out that many callers indicate that the initially entered into Adjustable Rate Mortgage (ARM) loans with low initial payments and manageable monthly payments. When the interest rate and monthly payment changes take effect, usually within two years, the ARM interest rate can increase drastically and continue to climb by more than one percent and up to a maximum of 16.100% throughout the terms of the loans in some instances. As a result, monthly payments balloon hundreds of dollars, costing thousands of dollars more each year.
“This is a crisis that affects every one of us and we must work together, and reach out to people in any way we can,” Thompson said. “If we work together, we can offer options and resources for homeowners and future borrowers who may become victims of subprime loans. We must do everything we can to preserve homeownership in the City.”
