NYC Opens Nation's Largest Foreclosure Center

The Center for NYC Neighborhoods, a new not-for-profit organization created "to assist homeowners at risk of mortgage foreclosure throughout the five boroughs," has been launched here. It is expected to assist 18,000 New Yorkers annually on a projected budget of $5.3 million and according to city officials will be the largest program of its kind in the nation.

"For cities like ours, increased rates of homeownership have meant stronger, thriving communities," Mayor Michael Bloomberg said upon the announcement. "By helping homeowners and potential homeowners navigate the world of subprime loans, we are helping New York to continue to grow and prosper."

Funding in the first year includes $1 million from the administration via the Department of Housing Preservation and Development and $1.8 million from the city council.

In addition to these significant public funding commitments, the city is seeking philanthropic support. The program planning committee is engaged in fund-raising efforts expected to raise the remainder of the funds from private and other foundation sources. The center will operate as an independent entity, the city said, dedicated to "a major expansion and coordination" of counseling and referral services, legal assistance, loan remediation, preventive outreach and education, training, research, and advocacy around subprime lending and mortgage foreclosures.

"Our city is in high emergency alert as more and more families across the city go through foreclosure," said city council housing and buildings chair Erik Martin-Dilan. "We need a central organization, like the Center for NYC Neighborhoods that will treat this crisis as we would a threat to our public safety. We need to protect our families and neighborhoods from predatory loans by making people with knowledge in the field available to all New Yorkers."

Department of Housing Preservation and Development commissioner Shaun Donovan applauded the program as a groundbreaking partnership between government, nonprofits, banks and philanthropic institutions that will protect homeowners and build stronger neighborhoods in times when foreclosures are a "critical issue" for the city. Even though New York's rate of foreclosures compares well to many other major U.S. cities, city officials said rates of subprime and high-cost loans have increased steadily in recent years, with about one in three loans originated in 2006 identified as high cost. A significant increase in foreclosure filings has been reported in the Jamaica, Baychester and East New York neighborhoods and on the north shore of Staten Island.

"For over 14,000 (New York) families, the devastating impact of the foreclosure crisis has hit literally too close to home," said council speaker Christine Quinn, who believes the new center "will set a new standard in prevention counseling."

The city noted, however, "The center will not be providing bailouts to lenders or homeowners," instead its "partners will help assess the capacity of the borrower to pay for a home," identify best options for the borrower to preserve their home equity, credit, and savings, and if possible avoid scams, bankruptcy and foreclosure.

Homeowners can access the center services by dialing 311, or walk-in to participating community-based organizations. Renters facing eviction due to an owner's foreclosure will also receive assistance.

The center will be governed by a board of directors, consisting of representatives from government, philanthropic institutions, the lending industry, academia, community-based organizations and community leaders.

The program is based on the success of the pilot anti-predatory lending program, "Preserve Assets and Community Equity," launched by the mayor in October 2005, as well as on the city council predatory lending initiative. For 18 months, the PACE program provided one-on-one counseling services to 1,052 clients, helped 104 homeowners obtain or save an estimated $26 million of home equity and new loans, and provided preventive information to thousands through education sessions.

"We face a foreclosure crisis in New York City, which is affecting not only tens of thousands of New York homeowners but also entire neighborhoods," said Sarah Ludwig, executive director of the Neighborhood Economic Development Advocacy Project, a member of the planning group that designed the citywide foreclosure prevention initiative. "The funding commitments announced will help thousands of aggrieved New York City homeowners avert foreclosure and avoid abusive subprime lending practices, and will help protect the city's neighborhoods and overall economy."

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