|Print this story||Permalink|
As the mortgage foreclosure rate continues to escalate in Brooklyn, District Attorney Charles Hynes joined Assemblymember Joseph Lentol and State Senator Martin Connor at the Brooklyn campus of Boruica College to inform Williamsburg residents about the dangers of predatory lending.
“I get very angry hearing that the federal government has no problem bailing out savings and loan institutions or taking care of Bear Stearns, but what about helping my constituents?” Lentol asked. “Why can’t the federal government protect and bail out those people who take out subprime and predatory loans?”
A predatory loan is the result of a company misleading or coercing a consumer into borrowing a home loan under terms that they cannot afford, which can negatively affect a consumer’s credit rating or lead to a foreclosure. Often, the loans have enticing introductory terms in the first few years, such as a fixed interest rate or no down payments, though the rates can quickly become variable and balloon to levels beyond the ability of the homeowner to repay.
“Education is important in preventing future foreclosures,” Connor said. “Finding a home and a mortgage has become so complicated that consumers need all the help they can get.”
Last year, Brooklyn and Queens had nearly two-fifths of foreclosure filings in New York State. In November and December, 80 foreclosures were filed each day in Brooklyn, and in March of this year, 500 homeowners put their homes on a pre-foreclosure list.
“Predatory lending is the crack cocaine of our era,” Hynes said. “Look at what is happening with subprime lending. People are going into foreclosure and that has a real effect on neighborhoods, the real estate market, and Wall Street.”
Assistant District Attorney Joseph DiBenedetto of the Rackets Division shared several stories with residents about mortgage foreclosure scams. Most of the homebuying victims DiBenedetto’s office has tried to help are from vulnerable populations such as the poor, financially unsophisticated, and the elderly, including a woman her 70s who took out a predatory loan where they found a falsified income letter and the employer listed did not exist.
“How did such a loan get granted by the bank?” DiBenedetto asked.
DiBenedetto has been prosecuting predatory lenders for the past ten years, but few have been found on criminal charges based on current federal banking regulations. DiBenedetto criticized mortgage lenders for not monitoring doctored appraisals or falsified income letters and the federal government for not regulating the lenders in the way that the New York state legislature suggested in the Home Equity Theft Protection Act in 2007. The Act would have allowed for a longer cooling off period for a consumer to consider signing a mortgage loan and included civil or criminal penalties on foreclosure rescuers if they did not disclose everything that they were required to disclose.
“The practices of subprime lenders are not smart but they are not criminal,” DiBenedetto said. “It never ceases to amaze me how the dishonest are able to swindle the honest.”
Several residents asked questions about credit cards, identity theft and home rescue loans, which DiBenedetto mockingly characterized as white knights. Home rescue loans, also known as mortgage rescuers, often ask homeowners to transfer their deed to the new lender while offering to make payments on any owed principal or interest.
“There is no way these homeowners would be able to buy back their homes from the white knight,” DiBenedetto said. “Those conditions were impossible for homeowners to reach.”
DiBenedetto advised prospective homebuyers to have a lawyer present to protect their financial interests when making large transactions such as buying a home and signing a mortgage.
“It’s the last thing you want to spend money on, I know, but it’s the best money you’ll spend,” DiBenedetto said. “Don’t listen to the white knight, especially if they say, ‘Have my lawyer.’ If you hear that, turn around and run.”
©2008 Community Newspaper Group
|Print this story||Permalink|
By submitting this comment, you agree to the following terms:
You agree that you, and not BrooklynDaily.com or its affiliates, are fully responsible for the content that you post. You agree not to post any abusive, obscene, vulgar, slanderous, hateful, threatening or sexually-oriented material or any material that may violate applicable law; doing so may lead to the removal of your post and to your being permanently banned from posting to the site. You grant to BrooklynDaily.com the royalty-free, irrevocable, perpetual and fully sublicensable license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such content in whole or in part world-wide and to incorporate it in other works in any form, media or technology now known or later developed.