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This weekend, I was lucky to be invited to moderate a panel on homeownership at Chhaya CDC’s Fifth Annual Home Buyer Fair. Many of the questions that attendees asked the panelists brought home the issues that Mireya Navarro raised in her article last week on Mayor de Blasio’s goals for affordable housing.
Reading Ms. Navarro’s article confirmed my conviction that the new administration’s goal of preserving affordable housing must include strategies to preserve affordable homeownership. Almost one-third of New York City homeowners earn less than $50,000 per year, well below the city’s average. And these homeowners, in turn, create even more affordable housing–with more than a quarter-million small property owners renting out apartments. With that in mind, we can certainly say that affordable homeownership IS affordable housing.
And many of the New Yorkers at Chhaya’s Home Buyer Fair agreed that we need affordable homeownership options that are accessible to borrowers from a variety of backgrounds. Despite the snow, an impressive number of families came to PS 69 in Jackson Heights on Saturday to hear from community groups like Chhaya and learn more about homeownership.
One issue that came up repeatedly was the need for down-payment assistance programs. We heard from several families who were financially prepared to make monthly mortgage payments, but struggled to save the large amounts needed for down-payments. For the families at Chhaya’s event and many more across the City, homeownership can provide long-term affordable housing, an avenue for future asset-building, and an opportunity to invest in one of our City’s many amazing and diverse neighborhoods.
In order to address the needs of these families, we need broad access tools like down-payment assistance to help them enter into homeownership and maintain affordability for the life of their mortgages. We also need to provide new and existing homeowners with clear and comprehensive information. Through free housing counseling and legal services, we can provide access to programs and information that will promote and protect affordable homeownership for New Yorkers. By supporting affordable homeownership, the de Blasio administration will be able to achieve their appropriately ambitious affordable housing goals.
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On January 10, 2014, the long-awaited Consumer Financial Protection Bureau (CFPB) mortgage servicing rules went into effect. Advocates and homeowners welcome these necessary protections and are hopeful the new rules will ease confusion for homeowners and advocates pursuing loss mitigation options. The new rules will mean fewer homeowners needlessly placed into foreclosure and greater assistance from servicers as they work to save their homes.
The new CFPB mortgage rules level the playing field by providing stronger consumer protections and addressing many systemic issues. The rules, for example, require:
- improved communications between servicers and homeowners
- prompt investigation and response to errors by mortgage servicers
- clarity as to all the options the homeowner has when trying to avert foreclosure.
The Center applauds the CFPB for their efforts in protecting and enforcing the rights of homeowners.
For more information on the new rules, the CFPB’s “Help For Struggling Borrowers” guide and “Mortgage Rules” fact sheet are great resources. If you would like to be connected to free help, please call 311 and ask for the Center for NYC Neighborhoods.
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Neighborhood Housing Services (NHS) of East Flatbush recently highlighted the Center and our MAP program in their Winter 2013 newsletter. NHS client and homeowner, Shonvelle Douglas, provides a moving testimony detailing her foreclosure experience and how MAP funds helped her and her family in their time of need. You can check out Shonvelle’s story and the NHS Winter 2013 Newsletter here.
Thanks so much to the team at NHS for sharing this story. We also thank you for your commitment to helping Brooklyn homeowners.
The Center works with 37 network partners throughout New York City ranging from housing counseling and legal service providers. Our Mortgage Assistance Program (MAP) helps New Yorkers who are having difficulty with their mortgage payments. MAP provides loans of up to $25,000 to eligible homeowners to prevent foreclosure and keep New Yorkers in their homes. MAP loans are 0% interest and repayment is deferred so that monthly payments are not required.
For more information about the MAP program or our network partners dial 311 or call us directly at 646-786-0888.
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The Center was invited to speak yesterday at Community Board 17’s (CB17) Housing Committee meeting. CB 17 represents the Brooklyn neighborhoods of East Flatbush, Remsen Village, Ditmas Village, and Rugby.
As Outreach Coordinator for the Center, I spoke about our work, partners, and programs. My colleague Clementine Brown also gave an informative presentation on our Mortgage Assistance Program (MAP) and Angela Davidson from Neighborhood Services of East Flatbush, one of our Brooklyn Network Partners, discussed reverse mortgages.
Thank you to Mrs. Barnett, Ms. Bayobeni, and everyone else who attended from Community Board 17 for the invitation and warm reception!
If you are interested in having the Center attend or present at your upcoming event, please contact me at 646-237-5917 or firstname.lastname@example.org.
Clementine Brown discussing the Mortgage Assistance Program with attendees
Meredith Nissenbaum, this post’s author, is completing her internship at the Center for New York City Neighborhoods today. We wish her the best of luck with the rest of her school year at Dartmouth College!
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The Center for NYC Neighborhoods strives to promote and protect affordable homeownership in neighborhoods across New York City. In most cases, the Center tries to keep homeowners in their current homes. However, some homeowners are faced with the challenging reality that the most affordable option may not be to stay in their home, but rather to explore a new beginning.
The Housing Mobility Program (HMP) was launched in 2013 with the intention of helping homeowners explore non-retention options. HMP assists homeowners in a multitude of ways including
- Helping homeowners understand their current financial situation
- Giving clients advice on housing and financial options when home retention is not possible
- Guiding the homeowner in finding new housing
- Determining whether relocation grants and other funds are available
- Connecting homeowners with trusted realtors to work on the sale of the home.
- Connecting with financial advisors and other services.
HMP staff give homeowners the information they need to make an educated decision regarding their housing situation. Recognizing that the decision to move can be very difficult for homeowners; HMP . can help counselors and clients begin what can be a difficult conversation. The Center has also found that some homeowners may have difficulty affording their moving expenses, as they may have experienced financial trauma related to medical needs, family expenses, or unemployment. Therefore, HMP provides one-time grants of up to $500 for homeowners transitioning to new housing.
As of December 2013, HMP has 34 cases that are currently in progress. The following is an example of one of the first cases taken on by HMP:
Ms. S was referred to the Center’s Housing Mobility Program by one of our legal services partners, the City Bar Justice Center, just weeks before Ms. S. was about to lose her home to foreclosure. Ms. S is a senior who struggled to keep up her mortgage payments after losing her part-time job. Without employment income, she could not afford to pay the monthly mortgage payments for her home in the South Bronx.
In search of decent and affordable housing, Ms. S. and the City Bar Justice Center looked to the Center. We were able to connect Ms. S with an apartment that she could afford by working with our community partners. On November 1, 2013, Ms S. moved into an apartment just two miles from her previous home, with a drastically more affordable rent. The building provides Ms. S with a safe and secure senior living environment, with laundry facilities on-site, an elevator, and outdoor space.
In addition, HMP worked closely to coordinate a series of activities aimed to facilitate Ms. S’s move, including attending home visits to better assess Ms. S’s needs, providing her with a relocation grant to cover her security deposit and first month’s rent, and raising an additional $1,500 in financial assistance to support Ms. S’s transition process.
HMP is already assisting a sizable group of clients. Rudy Ulin, Housing Mobility Coordinator, feels that “the need [for this program] is there, especially when a significant number of cases in the settlement conferences are now being resolved with non retention workouts”. Ulin hopes that the program “will become a central resource for New York City homeowners exploring non-retention options.” On a larger scale, the Center expects that this program will be integrated into housing counselors and legal services provider’s approaches to non-retention issues. Even if a homeowner is years off from having to make a decision about their home, the Center believes that starting the conversation early about all available options makes the process significantly more manageable. In an ideal world, every homeowner facing financial problems would be able to stay in their home. However, the reality is that the most affordable option for a select group of homeowners is to move forward. Not only does HMP help them in the process of finding a new home, but more importantly, provides homeowners with explanations, support, and hope for their future.
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Check out this week’s City & State joint op-ed on GSE reform, written by our Executive Director Christie Peale and Congresswoman Carolyn Maloney of New York’s 12th District. In the op-ed, Christie and Rep. Maloney discuss the importance of keeping the 30-year fixed-rate mortgage in any reform of Fannie Mae and Freddie Mac.
For more information on housing finance reform and its impact on affordable homeownership, you can read the Center’s policy brief on GSE reform, Moving Forward on Housing Finance Reform.
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Yesterday, Governor Andrew M. Cuomo and Benjamin M. Lawsky, the Superintendent of the Department of Financial Services, announced a proposal that would authorize shared appreciation mortgage modifications for New Yorkers. And there was more exciting news later in the day: Representative Mel Watt was confirmed by the Senate as the new director of the Federal Housing Finance Agency. The Center issued statements on both announcements, which you can read here.
For homeowners in New York City, the approval of shared appreciation mortgage modifications and the confirmation of Rep. Watt together have the potential to significantly increase the number of modifications with principal reduction to homeowners who need it most. In the previous blog post, we outlined why we support principal reduction for underwater homeowners. Principal reduction can prevent foreclosures, make housing affordable, and encourage continued investment in our neighborhoods. We encourage you to share this exciting news with your network.
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The Center for New York City Neighborhoods was proud to stand with Attorney General Eric T. Schneiderman and Jennifer Ching, Project Director at Queens Legal Services, last month to announce a historic $13 billion settlement with JPMorgan Chase. This settlement will return $1 billion to communities across New York State, representing a monumental victory for New York homeowners.
Center for New York City Neighborhoods Executive Director Christie Peale stands with New York State Attorney General Eric T. Schneiderman at the November press conference announcing a $13 billion settlement with JPMorgan Chase.
The $13 billion settlement resolves federal and state civil claims with JPMorgan Chase arising from the sale of residential mortgage-based securities prior to 2009. It will provide $4 billion in consumer relief, of which roughly $400 million will flow directly to New Yorkers experiencing some form of mortgage distress.
This settlement represents a critical victory for homeowners and advocates and the resources it will provide for New Yorkers are strongly needed. The challenges of the foreclosure crisis have been with us since 2007, and, for many New Yorkers, are a daily source of stress, confusion, and anger. It may not be in the papers every day, but across the state and the country, families are confronting one of the biggest and hardest challenges they’ve ever met. According to a recent report from New York State’s courts, there are over 80,000 homeowners across the state stuck in the legal process of foreclosure—and tens of thousands more who are behind on their mortgages.
In addition to providing more funding for legal services and housing counseling, we at the Center for New York City Neighborhoods are especially pleased to see that the settlement includes strong provisions mandating first lien principal reductions. The Chase settlement improves on advances made under the National Mortgage Settlement by putting targets and timelines on principal reduction, giving advocates the tools they need to hold banks accountable.
After working with over 25,000 homeowners, we’ve learned that principal reduction is the gold standard when it comes to preventing foreclosures. Principal reduction programs reduce mortgage balances for underwater homes, thereby making monthly payments affordable again and allowing homeowners to remain in their homes.
There are numerous benefits to principal reduction for homeowners, lenders, and communities. Helping homeowners remain in their homes is essential for those communities that have been destabilized by a tide of foreclosures. Properties that are foreclosed upon cause neighboring property values to drop, as well as an increase in crime rates. Principal reduction programs can also benefit lenders by allowing them to avoid the costly foreclosure process.
New research has demonstrated that principal reduction is the most effective way to keep underwater homeowners from losing their homes:
– A recent Standard & Poors analysis has shown that the likelihood of a new default is much lower for borrowers who obtain a principal reduction, and that these borrowers generally have a better chance of staying current on their mortgages afterward.
– A government analysis of outcomes from the Home Affordable Modification Program (HAMP) found that homeowners who receive principal reductions are more likely to remain current on their mortgage payments than homeowners who received loan modifications without principal reductions. The study determined that homeowners who received loan modifications with principal reductions were 24% less likely to redefault than those who received a modification with payment reductions, but neither forgiveness nor forbearance.
This settlement with JPMorgan Chase gives us the opportunity to show other banks further evidence that principal reduction works. It will mean more homeowners making mortgage payments, staying in their homes, and leading the way to a strong economic recovery.
Executive Director, Center for NYC Neighborhoods
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As New York City homeowners continue the costly recovery from Hurricane Sandy, The Center remains committed to delivering resources to assist those most in need. For New Yorkers who are having difficulty with their mortgage payments, the Mortgage Assistance Program (MAP) is one potential source of financial assistance.
MAP makes loans of up to $25,000 to eligible homeowners that can be used towards loan workouts that avoid foreclosure and keep people in their homes. MAP loans are at 0% interest and repayment is deferred so that monthly payments are not required.
Here are examples of how MAP has helped homeowners in mortgage distress as part of their recovery from Sandy:
- A Far Rockaway family whose temporary loss of employment due to Sandy left them unable to make their monthly mortgage payments. MAP provided the funds necessary to bring their mortgage current so they could resume making their mortgage payments once they returned to full-time employment.
- A disabled Staten Island homeowner who struggled to pay repair expenses on a fixed income while his mortgage was in a forbearance plan. MAP has been approved to pay off the amount he is behind on his first mortgage and settle his second mortgage, which will greatly reduce his monthly expenses.
- A Brooklyn family who used their savings to recover from Sandy, leaving them unable to afford the payments on their second mortgage. MAP is working to negotiate a settlement of the second mortgage, which is impinging on their ability to continue making payments on their first mortgage.
- An Arverne family that spent more than $12,000 in out-of-pocket repair costs and was unable to continue making payments on their first and second mortgages. MAP brought their first mortgage current and worked with one of our Network Partners to modify the second mortgage to a more affordable payment.
MAP funds are still available to help others in need! Dial 311 or call us directly at 646-786-0888 to access free help.
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Last year, New York Attorney General Eric Schneiderman launched the Homeowner Protection Program (HOPP), a three year, $60 million commitment by the Office of the Attorney General to fund and support housing counselors and legal services providers assisting homeowners at risk of foreclosure. As the administrator and manager of HOPP in New York City, The Center has partnered with 35 agencies that work one-on-one with homeowners to prevent foreclosures and stabilize our neighborhoods. Today, Attorney General Schneiderman announced the second $20 million funding commitment under the program and issued a report illustrating the first year’s successes. The Center is proud of our partnership with Attorney General Schneiderman and our accomplishments in year one.
In the past year:
- 8,012 households have been assisted by The Center’s HOPP-funded Network Partners
- Nearly half of those households had an annual income of less than $50,000
- The Center’s Call Center connected over 4,000 homeowners to free help at HOPP-funded agencies across the state
Read the official press release from the Office of the Attorney General
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