Senator Schumer’s Fighting Tactics Against Foreclosures

Posted in Foreclosures, August 29th, 2007 |

Figures speak for themselves. The numbers are frightening. In the Capital Region since the previous year foreclosures have increased by as much as 200%. In Albany County the jump is 63%. From 32 last July the numbers have gone up to 52 this July. In Saratoga County the situation is alarming with a 2500% high-jump. In July 2006 there was only one filing but this year it has risen to 25.

Democrat Senator Schumer of New York is of the opinion that it is the mortgage agents who have cajoled people to get into a situation which was beyond their means. The borrowers fell for the smart talk and overstretched their means.

Foreclosures are not isolated events that stay confined to a no-entry zone. The foul stink affects the entire neighbourhood. The other property units within 1/10th radius of the infected one will lose its equity by 1%.

Schumer has a three fold plan to fight the cancer. A full stop must be made on advertisements that do not specifically say when interest rates on a loan will escalate. Mortgage lenders must be federally licensed. This will sift the sugar from the sand. These sentiments are being echoed by the soon-to-be president of New York Mortgage Brokers. The group had been fighting for a decade for New York to join 47 other states in obtaining licensing permissions and insisting on financial education schemes. Schumer also wants registered brokers to forward sub-prime loans and create a $100 million fund to save foreclosure victims. Keeping these points in view he has submitted a bill.

The Senator opines that the average man is understandably ignorant about the clauses in fine print. It is the duty of the lender to educate them and warn them in this regard.

One of the unfortunate victims is William Cook of Schenectady who is caught in a snare – on one side is the foreclosure and on the other a sudden disablement. A non-profit organization has come forward to stop the roof falling from above his head. Cook is optimistic if the interest rates return to the original number then he will be able to brave it out and survive. But the moot question is – can Schumer’s plans bring under its umbrella thousands of Cooks suffering across the country?

The sub-prime programme itself was not weak. It gave a chance to many to own houses.