Subprime Scrooges

Senator Jeffrey Klein Releases Top Ten Banks Responsible for Foreclosing on New Yorkers during the Holiday Season 

Calls on State to Mandate Banks to Modify Loans  

New York, NY -- With the US economy officially in a recession and the holiday season in full swing, ten banks will issue just under 5,000 notices of foreclosure to New York families despite receiving $122,099,000,000 in the taxpayer funded bailout. Today, December 5, 2008, Klein released the top ten banks responsible for the most foreclosure filings from October-November in New York City, Westchester, and Long Island. Klein proposed to standardize Operation Protect Your Home, a foreclosure prevention forum, to help stem the rising tide of foreclosures in the State by requiring lenders to meet with borrowers and work out mutually beneficial ways to avoid foreclosure.

   Klein's report found that in New York City the top ten banks responsible for the most foreclosures from October-November 2008 are: US Bank, Deutsche Bank, Wells Fargo, HSBC, Bank of America, JP Morgan Chase, Bank of New York, Indymac, Citigroup, Capitol One.  

   The filings break down as follows:

Nassau County (1,033),  Suffolk County (762), Queens County (1,291),  Kings County (569),  Richmond County (301), Bronx County (214), New York County (102), Westchester County (331). 

   In September, Congress passed a $700 billion bailout package which relieved major mortgage banks of the growing burden caused by the dissolution of the credit market. However, average Americans remain dogged by financial failure and pending foreclosure. Despite the federal government's rhetoric toward home retention, little has actually been done to incentivize banks to modify mortgages and keep people in their homes. The banks listed in Klein's report, or Subprime Scrooges, have received billions in taxpayer monies, yet continue to file foreclosure proceedings rather than use programs like the federally funded Hope for Homeowners, to help distressed borrowers. 

   "This is socialism for the banks and capitalism for everyone else. We need to refocus the banks on loan modification and make the state a stakeholder so as to wield homeownership as a responsible investment rather than a financial scalpel," said Senator Klein. 

   In 2008, the New York State Senate worked with the New York State Banking Department and over 15 lending institutions to create Operation Protect Your Home. From The Bronx to Buffalo, distressed homeowners from all over the state attended one-on-one modification meetings with their lenders in seven counties. More than 3,500 at risk mortgages were discussed for modification under this program.  

   Governor Patterson's 2008 subprime lending law made formal settlement conferences between lenders and borrowers mandatory within 60 days of a foreclosure filing on any subprime or non-traditional mortgage. Senator Klein however, will introduce new legislation in January 2009 to extend this protection to all residential mortgage borrowers. Lenders will also be offered the option of satisfying this obligation by participating in a series of state sponsored Operation Protect Your Home events throughout the state for lenders serving large numbers of New York properties; Operation Protect Your Home is likely to be the most efficient way to connect directly with their borrowers. It will also keep more New Yorkers in their homes by facilitating direct contact before at risk mortgages reach the foreclosure stage 

   In addition, Klein proposed that State of New York Mortgage Agency (SONYMA) start refinancing troubled borrowers into 30 year fixed rate mortgages. Currently, SONYMA offers financing only to first time homeowners. Under Klein's proposal, the home would be appraised at the time of the SONYMA refinancing and the mortgage would be up to 90 % of the value of the mortgage. By empowering the agency to help any and all homeowners, the state would have a share in the equity of the home, and upon sale or refinancing it would benefit from the home's appreciated value. 

   All lenders would be required to work with SONYMA to determine if the homeowner qualifies for this refinancing option. 

   Klein lastly renewed his call for the Legislature to pass the Neighborhood Preservation Act S.7028 (Klein) which would allow a municipality to enforce safety and habitability requirements for every bank owned property. New York neighborhoods are experiencing the effects of the foreclosure crisis as homes fall into disrepair and drag down property values.

Download the Foreclosure Report

Comments

I hope every bank listed gets stuck holding the bag on every house they foreclose on.

the solution to the financial crisis is
to lower mortgage rates to enable new homes
to be purchases by first time home buyers
and to enable existing mortgages to be refinanced at much lower rates...this will
do two things..absorb the number of unsold
houses on the market thereby reducing inventory and allowing the homebuilders to
build...and also allowing those people who
are having difficulty paying there mortgages
at the currently higher adjusted rates they
agreed to but couldnt' meet to pay their
monthly payments...for those who have
substantial equity in their homes cash
outs should be encourgaged in order to stimulate the economy with the money taken
out..what you say its the same formula that
got us into this mess..yes it is with one
big difference...this time only qualified
home buyers putting 30% down can buy
and only those with 40% equity can refinance
those who are not in those categories should
not be homeowners in the first place

Why not give the money to the people not a company? What would happen if we gave every tax payer in this country A five thousand dollar Tax credit, and another five thousand in cash? This would not only get money into the economy but save the country billions in unpaid loans.

because that does not solve the housing
problem which is at the bottom of the financial crisis...you need to get housing
to stablize..and you need to let people stay
in their houses rather than walk away and
leave the house in foreclosure..that hurts
you if its your neighbor

The Democratic Party created the credit crisis in 1998 lowering the standards for the purchases of mortgages, by Fannie and Freddy Mac GSE compamies.Remember the Community-Renewal Act and leftist newspapers like the JNews, supporting little or no down payments by home buyers.Robert Rubin was the treasury secretary than, who later went on to sink Citibank and get paid $115 million.Barney Frank and Schumer were the architects of the demise of FNMA.

thats the same old conservative rant..
encouraging people at the lower end to
buy homes is a good idea...the practice
of luring them into adjustable rate
mortgages was not a democratic creation
it was the creation of morgage lenders who
simply didn't care about the creditworthiness of their borrowers..and
it was the product of poorly educated
buyers who didnt understand much about
finance..the republicans controled
congress for 6 years..i didn't see them
step in a regulate the practice of
bundling mortgages and selling them out
to investors all over the world..or the
practice of ins companies like aig insuring
the mortgage bundles but not getting anywhere near the premiums that were
necessary to allow them to cover defaults
you can blame some democrats...but in fact
alan greenspan a good conservative republican didn't see it coming either
and he encouraged the practices that got us
here.THE ISSUE NOW HOWEVER IS HOW TO GET OUT

Agreed Alan Greenspan was also a culpit,but the democratic liberal creators of the mess will only make it worse.The housing bubble started in 1998 under Rubin,Clinton and the democratic congress.They alone lowered credit requirements for mortgages that undermined the quality of mortgage backed bonds and securities.The mortgage brokers,the investment banks, the house flippers,hedge funds and commercial banks just jumped on the free lunch wagon created by the liberal democrats.How did it help the poor driving $200 thousand dollar houses to $500 thousand?

edelman sounds like a liberal from jerold nadler's district

Edelman is an eccentric, ego driven chameleon who should never be allowed to speak for the Republican Party. He's no republican, just a yellow sock, $1,000 suit ass who hasn't got a principled bone in his body. His signing on with turncoat dem Janet DiFiore's campaign and defense of federal target Al Pirro should tell you all you need to know about this phony. And I understand he used to tape his News12 appearences and play them at his cocktail parties, boring his guests to death and making an early evening for all.

[Elizabeth Gustin]

These ten companies securitized the same mortgages over and over to different investors. If they do not continue to foreclose on homes their Ponzi schemes will be discovered.

someone is not only a jerk but has no
backround in economics..just the same
old rush limbuagh garbage over and over
phonies don't stand by their friends in
bad times phonies desert them..but
mike didn't desert al or jeanine
and i will tell you what he will make
sure castro goes down and goes down
hard...as for the cocktail parties
just another jealous comment by an asshole

i have noticed that those bloggers who
have only bad things personally to say
about others really don't seem to be
able to articulate a position of their
own...like the cocktail party spear...
clearly that person has never been
invited to an edelman party at the club

the subrime mess started way back in thw 70's when banks were allowed to buy each others mortgages as comodities. Without regulation it all went down hill. Add in the credit default swaps many done since 2005 and you get a disaster.

Then what does Bush and those crazy senators do, they bailed out the banks without any assurances that the money would trickle back to the consumer. What did the banks do? They held the money for themselves so the credit crunch continues.

It's all a joke and this country is no different than Russia an oligarchy of wealthy families feeding off the middle classes. This was Bush's last act of $ucking this country by making his buddies, the wealthy, richer on the backs of the taxpayer.

its not that political..bush was not making
his friends wealthy...they let lehman go under...the big financial institutions provide credit for main street..the average
person who needs to borrow money on credit
cards, for college and small businesses who
need credit...the credit crunch was world wide but it was based in part on all the mortgages that were bundled together many
of which were bad loans...so if the banks
couldn;t tell what the value of their
investments in these bundles were worth
then they couldn't determine the capital
needed to lend against them..in addition
insurance companies like aig..insured these
by issuing exotic policies which had they
known of the bad loans contained in them
would have had to have charged far more
as a premium against default..when the
paper turned bad it was like dominoes..
so the government had little choice
its not fair to blame either the republicans
or the democrats....it was a combination
of mortgage lenders being greedy..lack of
regulation of the derivative markets..
the encouragement of teaser rates which
wound up doubling the montly payments
within 3 years...and finally the polcy
of the democrats primarily in boosting
home ownership on the part of minorities
by lowering lending standards...thats the
problem..the fix is to use the TARP to
back up good credit home owners who got
over their heads by changing the terms
of the mortgae from adjustable to fixed
and interest only for 7 years. the government also has to buy long term treasuries to let the interest rates fall
to where new home buyers pick up the inventory that is on the market and also
to let present homeowners refi and take cash
out...if they are credit worthy..the lower
rates would allow owners to use the cash
to stimulate the economy...but new rules
have to be promulgated at the same
time...you cannot borrow for a home
purchase or a refi unless 35% of the market
value of the house is composed of your equity....and that no ajustable rate teasers
are permitted..

[Melika]

This is some of the best writing that I have seen on this subject. Keep more coming

[Melika]

This is some of the best writing that I have seen on this subject. Keep it coming.