New Yorkers Hemmed In By Foreclosure Crisis
With the surging waves showing no signs of receding, New Yorkers continue to be hemmed in by foreclosure crisis. It is alleged that fraudulent sub-prime mortgage lending has led to this meltdown. Each single foreclosure has a snowballing effect and affects the surrounding neighbourhood – its environment and property values.
Foreclosures are a costly judicial process. It is more profitable for the lenders, in this critical situation, to keep the borrowers in the houses that are their homes, so that they can continue to pay monthly dues. Abandoned properties become a headache for municipalities as these attract crime and disease.
The State Legislature has come forth with specific plans to help the foreclosure victims in New York. Last year there were about 3,000 foreclosure postings in Erie County. The findings of The Western New York Law Center show that 20% of these postings are related to the sub-prime adjustable rate mortgages. To see that that the laws are finally passed the two parties must be jointly committed rising above petty politics. The governor’s plan has a good framework that should be acceptable to all. It entails the sending of timely foreclosure notice to the borrowers, who are then to contact housing counselors. The latter will be able to guide them through the negotiating process. The new law will make it mandatory for lenders and borrowers to sit across the table in the initial stages of the process.
So far it has often been the case that the proper authority with whom negotiation can be done remains unidentified. But now it becomes compulsory that the appropriate person or authorized persons must do the talking without prevaricating. Lenders have complained that the foreclosure operation is too lengthy and a quicker way out would be welcomes. In Erie County the foreclosure process takes 135 days to run through its full course. The governor’s bill addresses all the issues in detail
A Wall Street Journal reports that by the latter end of 2006, about 61% of the sub-prime loans had gone into foreclosure. But most of the borrowers had enough credit scores to enable them to opt for conventional loans having better terms. It is generally understood that the lender will consider the repayment ability of the borrower after the expiry of the ‘teaser’ rates. It is the duty of the lender to see to the interests of the borrower and not to try to trip him or her anyhow and somehow.
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