Schumer looks to prevent foreclosures in New York
With more than 91,000 New Yorkers in danger of losing their homes to foreclosure by the end of 2008, Sen. Charles Schumer (D-N.Y.) is looking to put an end to the subprime loans that are causing the problems, according to a recent article on NYDailyNews.com.
In fact, an analysis by his office revealed that an estimated 1.8 million American families — including nearly 23,000 in New York City and 19,000 in Nassau and Suffolk counties — could face foreclosure within the next two years when their subprime loan rates increase.
Here’s a snip from Chuck:
“For thousands, the American dream of homeownership has turned into an un-American nightmare. Thousands of middle-income and lower-income New Yorkers were tricked into borrowing these loans, and they are loans designed to fail. The first step is making sure that borrowers are protected from these usurious lenders. It’s long past time that we ensure that American families are protected from loans that promise them the world and then bury them in debt.”
To address the problem, Schumer recommends a response on the federal level that includes:
- establishing a national regulatory system to target “rogue” mortgage lenders and brokers;
- eliminating “liar loans” by creating a suitability standard for borrowers;
- prohibiting prepayment penalties, stated-income loans and “pick a payment” gimmicks that coerce borrowers into signing higher loans than they cannot afford; and
- creating a state foreclosure prevention task force.
It’s important to note that bad loans are not the only factors that contribute to foreclosure increases. Illness, divorce, job loss and other personal issues often affect distressed homeowners and cause them to fall behind on mortgage payments.
Furthermore, not all subprime loans result in foreclosure.
Therefore, it’ll be interesting to see how the interests of homebuyers and lenders are both represented if and when tighter restrictions are implemented.
Stay tuned.
Original post by Foreclosure.com
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