Foreclosure Hearing Addresses Housing Crisis in Bed-Stuy

According to the Center for NYC Neighborhoods, the economic crisis is affecting homeowners in Bed-Stuy. Still.

The Center reports close to 700 foreclosures in Bed-Stuy this year so far, making Bed-Stuy among the top-five communities hit the hardest.

City Councilman Al Vann expressed frustration for residents of his 36th District (representing Bed-Stuy and parts of Crown Heights), pointing out that many of these foreclosures could have been prevented.

"[The] economic downturn and the inflexibility of mortgage holders have fueled the foreclosure crisis throughout the city and country, and Black and Latino communities that were targeted by predatory lenders have been extraordinarily impacted," said Vann. "Bed-Stuy, as one of these communities, remains one of the most heavily impacted in NYC."

Vann, along with leaders of several dozen housing advocacy groups met last Monday in City Hall for a NYC Council Community Development committee hearing to discuss the foreclosure crisis in New York City.

Vann chaired the hearing that brought forth testimonies from leaders of several advocacy groups on the affects of the crisis and foreclosure prevention initiatives currently being implemented by federal and state governments.

Doreen Odom, attorney for the Foreclosure Prevention Project of Queens Legal Services, opened the meeting by highlighting the negative role banks have played in this crisis via predatory lending practices, broadly defined by the FDIC as "imposing unfair and abusive loan terms on borrowers." She pointed out that there have been several reported instances of banks foreclosing homes when they don't have jurisdiction to do so.

"As the law stands, if a homeowner discovers later in their foreclosure process that the bank does not own their note and mortgage, they may not have any recourse to prevent losing their home to an unrelated third party," said Odom.

According to the Center for NYC Neighborhoods, there have been 13,500 foreclosure filings in New York City during the first three quarters of 2010, down from 15,000 for the same period last year. The Center estimates there will be 18,000 more filings before the end of the year. In addition, property value has declined an average of 20 percent, a slight improvement from the 35 to 40 percent in recent years.

Eleven neighborhoods outside of Manhattan account for over half of all reported foreclosures. Bed-Stuy ranks fifth on this list, while Jamaica in Queens remains at the top of the list for the second consecutive year.

City Councilmember Diana Reyna, of the 34th District, put the issue of foreclosure into a city-wide context:

"This foreclosure crisis has evolved into an impact on tenants," said Reyna. "Because homeless is rising, it's therefore affecting city services and the number of people we can help. We need to start tracking housing in relation to the community and development, because we're not tracking these people until they become the invisible party."

Michael Hickey, executive director of the Center for New York City Neighborhoods , testified on the foreclosure initiatives being implemented by the Center for NYC Neighborhoods. They have been able to help 1,500 home owners affected by foreclosure in Bed-Stuy and other neighborhoods receive mortgage modifications. In addition, Hickey urged for, among other things, amendments to the current federal bankruptcy law and committing to a temporary freeze on foreclosures.

"As of now, we have been able to help one out of 10 families who come through us, which is a higher percentage compared to similar programs nationwide," said Hickey.

James Sanders Jr., city council member for the 31^st District in Queens, was not impressed by the numbers that Hickey presented.

"For any agency to brag about having a 1 in 10 success rate is unacceptable," said Sanders. "If the Board of Education bragged about having a 1 in 10 success record with every student, what would the public reaction be?"

The lone representative for Brooklyn to testify was Laurie Izutsu-Keener, an attorney for South Brooklyn Legal Services, who reported on its efforts to get Governor Patterson to sign the Access to Justice Lending Act. The bill, which passed both houses of the State legislature in June, allows homeowners who successfully defend themselves against foreclosure proceedings to receive reimbursement for legal fees from the lenders who sued them.

Currently, there are seven community organizations in Bed-Stuy who are dedicated to educating local residents on the dangers of predatory lending including Bridge Street Development Corporation, Bedford-Stuyvesant Restoration Corporation, and Neighborhood Housing Services of Bedford-Stuyvesant.

"I am greatly encouraged by the collaboration of our premier community-based organizations," said Vann in a statement. "Their collective ability to engage and inform the residents of our community will certainly reduce the number of neighbors who become duped by predatory lenders."

For more information on the foreclosure crisis and how to avoid foreclosure, visit www.knowthefactsbedstuy.org

CORRECTION: In this story, we reported that South Brooklyn Legal Services was the only representative from Brooklyn to testify. However, that is incorrect: Deb Howard from Pratt Area Community Council (PACC) testified, as well as a representative from Bedford-Stuyvesant Legal Services.