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for larger version       Meeks Hosts Meeting On Foreclosures,Predatory Lending
"There was a significant change in the mortgage industry…," said Ludwig. "Subprime loans emerged in the late 1990s. These mortgages, in theory, are made to people with less than perfect credit and lenders charge more for them. Freddie Mac and Fannie Mae conducted a study which found that one-third of subprime borrowers had prime credit and were steered to higher rate loans. Adisproportional amount of older homeowners on fixed incomes and first-time home buyers were preyed on by home improvement contractors, mortgage brokers, and real estate agents who were in collusion with attorneys and appraisers." "These loans are expensive and are offered primarily in communities of color with enticing introductory rates. When these mortgage rates reset- and we have seen rates reset after one day in the most extreme cases- the borrower cannot afford to pay the new mortgage amount," Ludwig stated. "Subprime loans are discriminatory, abusive in nature and harm the borrower," Ludwig continued. It is estimated that one in five subprime loans will end in foreclosure - 20 percent of the market. Displaying a map, Ludwig explained that in some neighborhoods in Southeast Queens, there are blocks with as many as five homes with foreclosure actions filed against them. "Not all of these homes will end in foreclosures, but these are families who are in distress," stated Ludwig. "As a result, we need to get the word out that foreclosure rescue scams do not work. If anyone has been victimized by this issue, you should immediately contact Legal Aid Services, the Queens District Attorney or your elected officials." The subprime loan numbers in Southeast Queens are staggering. In a New York University Study furnished by the City of New York Commission on Human Rights, "The State of New York City Housing Neighborhoods- 2006," data from 2005 reveals that for the Jamaica/Hollis community, within Community Board 12, the proportion of subprime loans for homes purchased had surged to 51.8 percent, ranked #2: in New York City, almost six times the rate in 2003 (an increase from 9.3 percent to 51.8 percent). At the same time, the percent of refinance loans that were subprime was 49.1 percent, the sixth highest in New York City. While not as high as in neighboring Queens Village, the rate of subprime home purchase loans more than quadrupled from 2002 to 2005 (8.4 percent to 37.6 percent). In 2005, more than two-fifths (42.1 percent), of refinance loans were of subprime origin. "The impact of foreclosures is significant not just to the families, but there is a loss to the stakeholders of the community - a reduction in property value," stated Lloyd London of NCRC. NCRC is a trade organization that seeks to increase fair lending and economic power to all and has developed a fund called the Home Ownership Sustainability Program that seeks to provide mortgage counseling and refinance options for homeowners to keep them out of foreclosure.
"Many individuals have been misled, and some exploited in their pursuit to obtain a home for their families," stated Meeks. "As a community, we cannot afford to remain silent. These alarming numbers have triggered urgency for legislative remedies. It is important to know that your elected officials are working together to eradicate these corrupt practices from our community."
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