US Treasurer Attends Queens Subprime Seminar
With subprime mortgage woes hitting all over the nation, including Rockaway, community members from the 31st councilmanic district heard advice on fighting the problem from the United States Treasurer at a seminar last weekend.
U.S. Treasurer Anna Escobedo Cabral, at the invitation of Councilman James Sanders Jr., spoke to community leaders, civic leaders and residents about the housing crisis during a visit to PS 156 in Laurelton on April 19. After the “Rescue Your Home” seminar she spoke with The Wave.
“There are people there waiting to answer the phones both day and night,” said Escobedo Cabral. “They’ll help you walk through the process if you’re having difficulty reaching out to your lender or getting any kind of response. They can be an advocate for you.”
According to its website, since July 2007 the program has helped more than one million homeowners avoid foreclosure. Free counseling is available via phone at 1-888-995-HOPE. The program, through the alliance it has set up with counselors, servicers, investors, and other mortgage market participants, has sent out over one million letters to at-risk borrowers (those who have fallen behind in their payments) since October 2007 urging them to contact their lender.
“The earlier you do something the better off you are,” said Escobedo Cabral. “If you can do that early enough in the process, you may be eligible for a refinancing option. You may be eligible for the freezing of your loan for five years in terms of the interest rate. Therefore, the payment remains the same.”
Escobedo Cabral said, if a homeowner can keep making those payments over the five year period, then by the end of the five years, “you’ll be able to refinance or you’ll have an increase in your income and you’ll be able to deal with changes in your loan.”
The treasurer said, the HOPE NOW program has “modified or made changes to loans so that people can stay in their homes.”
The HOPE NOW website (www. hopenow.com) explains that such changes can include “a reduction in the interest rate, forgiveness of a portion of principal or extension of the maturity date of the loan.”
While HOPE NOW claims success, there are critics.
Last month, CNNMONEY.com ran an article about the program.
The article states that 278,000 homeowners actually had their mortgages changed by freezing, reducing rates or reducing the balances.
The rest of the 1 million simply were put on repayment plans that included the previous missed payments.
Councilman Sanders believes that HOPE NOW can only help less than five percent of those living in the Rockaway community.
“In order to be helped, you cannot be behind in your mortgage,” Sanders told The Wave. “That knocks out just about everyone.”
He did add that he believes people should reach out to the program.
“There’s a certain portion of people that will be helped under any program,” he said.
Sanders supports legislation by State Senator Frank Padavan and Assemblyman James F. Brennan for a one-year ban on foreclosures.
Another federal option, explained Escobedo Cabral, is FHA Secured Loans.
“FHA Secured Loans are federally guaranteed loans that lower interest rates that the federal government would like to be able to put you into if you’re eligible,” said Escobedo Cabral, who added that the program has granted approximately 300,000 FHA loans since September 2007.
“Don’t wait until you’ve missed too many payments for your options to dwindle down to nothing,” said Escobedo Cabral.
She said that 50 percent of those who wind up losing their home never made any attempt to reach out for help.
“That’s a problem and we can’t afford that,” Escobedo Cabral said. “So, we’re trying to make sure that that doesn’t happen.”
The administration is also looking to find ways to avoid further mortgage crises.
“We’re also working to make changes in ways in which the mortgage market works so we can protect against this in the future,” she added.
The bottom line, she said, is for people to not wait until the last minute to reach out for help.
“There is a lot of help out there. You’ve just got to ask for it,” concluded the treasurer.