Workshop Highlights Bronx Fight to Save Homes

by Chloe Tribich

Patricia Carron of Morris Park was one of more than 100 distressed homeowners who attended a foreclosure prevention workshop at Lehman College on Nov. 15 hoping to get help. Her monthly mortgage payments have increased from $1,900 to $3,300 in two years, and now she’s worried that she and her 7-year-old daughter could become homeless.

“I had no idea [the monthly payments] would go up like that,” Carron said. “Otherwise I would not have done it. I just want to keep my home.”

By 11 a.m. on that rainy Saturday morning, the college’s Music Room was already packed with nearly 100 homeowners waiting to speak to housing counselors. Some were days away from losing their homes. Others had not yet missed payments, but were there to prevent trouble.

Gracie Watson from Wakefield wanted to renegotiate her interest rate from 8.5 percent down to 7 percent. She is not yet behind on payments, but spends 52 percent of her income on her mortgage. With her husband undergoing chemotherapy, she fears she can’t hold out much longer.

“I want to take care of it now,” she said. “I’m hoping they can work with us.” Several days later, she had not heard her lender’s final decision, but remained optimistic. “I think it will work out,” she said.

The office of the New York City Comptroller, which hosted the event, counted 133 attendees over the course of the day. “We will continue to monitor the progress of these cases to ensure homeowners are afforded every option possible,” said Comptroller Bill Thompson, who hosted a similar event in Queens and will host another in Brooklyn on Dec. 6.

Bronx homeowners have seen their share of hardship. According to the Furman Center for Real Estate and Urban Policy at NYU, the borough’s homeowners have the highest proportion of foreclosures. Out of every 1,000 Bronx homes, 18 have been hit with foreclosure, compared to 16 in Brooklyn and 5.9 in Manhattan.

Under pressure from advocates and grassroots groups, New York State passed a foreclosure prevention bill over the summer. And some banks say they have implemented practices designed to avert foreclosures.

“We’ve helped over 650,000 borrowers [nationwide] keep their home through a whole variety of measures,” said Chase spokesman Mike Fusco. The measures range from proactive homeowner outreach to providing more foreclosure prevention counselors to implementing an independent review process to head off what the bank calls “unnecessary foreclosures.”

Oscar Morillo, executive director of Neighborhood Housing Services (NHS) in the north Bronx, remains skeptical. “The new laws and programs will be helpful,” he said, “but the solution to this problem is to restructure the loan according to household income.” Morillo estimated that only 15 to 20 percent of NHS clients have been able to get their loans modified to fit their income.

Oda Friedheim of New York’s Legal Aid Society cautioned that homeowners in trouble should obtain legal help if possible, partly because “most servicers fail to do appropriate and timely loan modifications, and when granted, modifications are often unaffordable.”

Most experts agree that the peak of the local foreclosure crisis has passed, but it still remains a serious threat. Data compiled by University Neighborhood Housing Program (UNHP), a local nonprofit research and advocacy group, shows that foreclosures in the northwest Bronx reached a high of 74 during the third quarter of 2007. For the third quarter of 2008, they counted 64.

The future, though, remains uncertain. “We’ve probably seen the peak in terms of bad loan making [which caused much of the crisis], but rising unemployment could worsen the rate of foreclosure,” said Gregory Lobo Jost of UNHP. The Bureau for Labor Statistics reported that in September 2008, the Bronx’s unemployment rate was 7.7 percent. Manhattan’s was 5.1 percent.

Another negative side-effect of foreclosure problems could be banks’ unwillingness to lend to deserving borrowers from poor neighborhoods of color. A recent Furman Center report said that prime loans to black and Hispanic borrowers decreased by 23 percent and 15 percent, respectively, from 2006 to 2007, yet prime loans to white and Asian borrowers increased by 4 percent and 18 percent, respectively.

As the economy continues its downward slide, Jost points out that more local job losses could exacerbate the effects of foreclosures and credit tightening. “We’ll have to wait and see,” he said. “No one knows how bad it will get.”