By State Senator Jose Peralta
The mortgage crisis has wreaked havoc across the country. Millions of Americans have lost their homes.
Queens has consistently been at or near the top of the list of counties in the state hardest hit by the foreclosure crisis.
And the crisis is not subsiding. According to a study recently published by the New York Federal Reserve Bank, one in nine homeowners in Queens is currently delinquent 90 days or more on their mortgage – or is in foreclosure.
Some of the communities I represent have been hit especially hard by the crisis. In Corona, nearly 20 percent of homeowners are currently delinquent 90 days or more on their mortgage or are in foreclosure. The rate is 15 percent in East Elmhurst and 10 percent in Jackson Heights.
In light of the alarmingly high rates of seriously delinquent mortgages, I hosted a forum recently for struggling homeowners in conjunction with State Attorney General Eric Schneiderman and local non-profit agencies working on foreclosure prevention.
The attorney general’s office and community-based organizations, such as Queens Legal Services and Neighborhood Housing Services of Northern Queens, provided advice and hands-on assistance to homeowners facing potential foreclosure.
But in a single two-hour session, it’s impossible to even scratch the surface of the problem.
That’s why I am also asking Governor Andrew Cuomo to continue funding a program that provides homeowners with counseling, legal assistance and help negotiating with banks. Funding for the state’s $25 million Foreclosure Prevention Services Program expires at the end of the year.
Four recent studies conducted by the Joint Center for Housing Studies of Harvard University found that housing counseling increases the likelihood that homeowners will be granted a loan modification by 200 percent and that counseled borrowers received more favorable terms on their loan modifications, including lower monthly payments.
Similarly, legal representation at the mandatory settlement conferences helps to level the playing field for homeowners. The banks they are negotiating with are always represented by an attorney. When homeowners are also represented, the process is more fair, more efficient and ultimately more successful in achieving the best possible outcome.
The impact of foreclosed and abandoned homes can be costly and devastating on communities. Studies show that violent crime increases on blocks where a house goes into foreclosure. Other costly effects include lost tax revenues and declining home values.
We are all well aware of the intense and competing demands for painfully limited budget resources. But investing in foreclosure prevention helps save money, keep families together and preserve communities.