By Ivan Pereira
Queens Village resident Jean−Andre Sassine said he’s at the end of his rope.
After being laid off from his job as a temporary organizer for the UAW in August, the 42−year−old and his family faced tough choices that have put his home on the brink of foreclosure.
“I had to make a decision between paying my mortgage or health insurance costs,” he said. “All of those bills kept coming in and we have to eat.”
After deciding not to pay the mortgage, he is more than seven months behind in his loan payments. Sassine said his only hope of averting homelessness is President Barack Obama’s foreclosure rescue plan, which has received a mixed response in the city as well as across the country.
The president’s plan, which takes effect March 4, will use $275 billion of the $700 billion stimulus package to help nearly 5 million American homeowners refinance their mortgages.
The U.S. Treasury Department will invest in government−sponsored lenders Freddie Mac and Fannie Mae to increase their portfolios to $900 billion The plan will also remove the agencies’ restriction on allowing borrowers to refinance guaranteed loans worth more than 80 percent of the home’s value up to 105 percent of the home’s value.
Other banks will be getting help from the federal government as well, Obama said. Participating lending institutions will receive investments of $1,000 from the Treasury for each modified loan and as much as $1,000 for three years when the borrower stays current.
The cash will be applied to reducing the mortgage’s principal, according to the plan. Participating lenders will also be able to renegotiate their loans so that payments do not exceed 38 percent of borrower’s income.
“Taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream,” the president said in his Feb. 18 speech outlining the plan.
The majority of the foreclosures were the result of subprime mortgages, loans that start with low interest rates and increase rapidly over a short period of time, according to the president. After he heard about the plan, Sassine said he felt relieved knowing help was on the way.
The father of two said foreclosure proceedings were imminent.
“I find that having Obama talk about a plan like this scares banks into voluntarily fixing this,” Sassine said of the foreclosure crisis.
U.S. Rep. Gregory Meeks (D−Jamaica) also praised the president’s action to solve the housing crisis during a meeting in St. Albans with other southeast Queens elected officials, including state Sens. Malcolm Smith (D−St. Albans) and Shirley Huntley (D−Jamaica) and City Councilman Leroy Comrie (D−St. Albans).
The leaders represent the neighborhoods with the largest number of foreclosures in the state, according to Community Board 12, which covers parts of southeast Queens.
Nearly 1,000 homes were foreclosed in southeast Queens in January according to Meeks.
The congressman, who sits on the House Committee on Financial Services, said he would be going over the specifics of Obama’s bill this week in Washington and would make sure at−risk homeowners could get their help immediately.
“There has to be a huge focus to keep people in their homes,” he said.
But not all Queens homeowners were enthusiastic about Obama’s plan. Some residents questioned why their taxpayer dollars had to pay off loans for homeowners who could not afford them in the first place.
Others, like Kay Kwon of Bayside, said they were unsure if the multibillion−dollar plan would be enough to save the millions of American homeowners who are in incredible debt.
“How much can you give to help so many people?” asked Kwon, 51, who owns a garment store in Manhattan. “I don’t know how [the president] is going to do it.”
During a rally outside a foreclosed home in Laurelton last Thursday, several city leaders said they were confident Obama’s plan would not waste taxpayer money and would be used to help the homeowners who were are in serious need of aid.
“If someone really did something wrong and didn’t make their payments, there is a system for that,” said City Councilman John Liu (D−Flushing) at the rally.
Sassine said he does not want to burden other Americans, but just wanted a second chance for his home.
“I’m actively looking for another job. When I get a job, I’m willing to pay my bills and get back into the system,” he said.
Reach reporter Ivan Pereira by e−mail at ipereira@timesledger.com or by phone at 718−229−0300, Ext. 146.
