By Alex Christodoulides
“For tens of thousands of Americans, including many New Yorkers, this new year will be anything but happy,” Silver said, referring to those personally affected by subprime home loans whose interest rates have ballooned beyond the owners' ability to pay.Silver announced the legislation at his office on Broadway in downtown Manhattan, where he was flanked by representatives from Queens, Brooklyn, Manhattan and the Bronx, including state Assemblywoman Ellen Young (D-Flushing) and Assemblymen Rory Lancman (D-Fresh Meadows) and William Scarborough (D-St. Albans). Queens has been particularly hard hit by foreclosures resulting from owners defaulting on subprime loans, especially in Springfield Gardens, Rosedale, St. Albans and East Elmhurst. Springfield Gardens is the hardest hit, with 592 homes foreclosed on in 2006 alone and $174 million in subprime loans.”The proposal being advanced by the Assembly majority today includes legislation to assist struggling homeowners, provide counseling and reform questionable industry practices,” Silver said. “Our plan is a much-needed mix of direct financial assistance, support for counseling and legal services, and active lender participation in solving the problem.”The proposal offers $150 million in financial assistance to borrowers in default on owner-occupied homes, plus $30 million for financial counseling and legal services so that the homeowners can develop an achievable lending plan, Silver said. The legislation has not gone yet to the Republican-controlled state Senate, which has its own plan to address the subprime lending crisis.Lancman said the bill will help borrowers who were taken advantage of by mortgage lenders and will better regulate mortgage brokers, requiring them to act in the borrower's interest. The language of the bill requires lenders and brokers to disclose the escrow, taxes and insurance fees associated with subprime and nontraditional loans, he said”Most subprime loans go through brokers, and these aren't your local Chase Bank,” Lancman said. “A stockbroker can't take a kickback to recommend a stock to you, but mortgage lenders can do that: A broker can take a percentage for recommending a loan to you. This legislation will ensure that brokers and lenders don't recommend loans people can't afford.”Assemblyman Darryl Towns (D-Brooklyn), who is chairman of the Banking Committee and a co-sponsor of the bill along with Assembly Housing Chairman Vito Lopez (D-Brooklyn), stressed that the legislation is “not a bailout, it is to help owners stay in their homes so they can pass that wealth from generation to generation.”The subprime and nontraditional mortgage industries, including interest-only mortgages and those made with little to no income verification, disproportionately target lower-income borrowers and communities of color, Towns said. Reach reporter Alex Christodoulides by e-mail at achristodoulides@timesledger.com or by phone at 718-229-0300, Ext. 155.
