No one knows more about the country’s money woes than the average Canarsien.
But in this small community’s eyes, the “F” in the often euphemized phrase “fiscal crisis” stands for “foreclosed homes.”
“If you’re not going through foreclosure, then you know someone who is going through a foreclosure,” State Senator John Sampson told the large assemblage at Holy Family Church at East 92nd Street and Flatlands Avenue, attending a special Informed Voices Civic Association meeting Monday. “Canarsie doesn’t just have the highest foreclosure rate in the city, but it also has one of the highest foreclosure rates in the state.”
It was part information meeting, part challenge to take action. Those at the meeting, moderated by the always spry Informed Voices president Wanda Ihrig, were given loads of information on how they can check their retirement accounts, deal with banks and check in with their brokers.
But the heart of the meeting was the mortgage crisis, which is hitting Canarsie with all of the power of a Sherman tank.
“Right now mortgages are really a problem,” explained former Assemblymember Frank Seddio, a longtime mortgage broker. “If I had to guess, at least ten people in this room have a problem with paying your mortgage.”
Seddio took the audience as far back to the 1980s when the federal government loosened up the rules on how mortgages could be doled out.
Over the years, fierce competition between banks and mortgage companies, bolstered by rising home values, loosened the rules even more.
“It got to a point when only two questions were asked,” explained Seddio. “One: Are you breathing? Two: Do you have a job?”
Besides a simple credit check, that’s all some banks required to hand over the keys to a new home.
“In the end mortgages were given to people who never should have received them,” Seddio explained. “It’s that simple. People were able to buy houses they couldn’t afford.”
If they couldn’t make the mortgage and had to sell, the bank didn’t care, since they would probably profit from the re-sale of the home anyway.
But that all changed when people stated getting mortgages that were higher than the re-sale value of their homes.
When the real estate bubble burst, property owners found themselves in a bind — if they had to sell their home, they would end up selling it for less than they bought it for – leaving them with a chunk of their mortgage that they couldn’t possibly pay back to the banks.
Multiply this simple homeowner’s conundrum by several million, and the banks are reeling back on their heels, refusing to give out any new loans.
Some banks were forced to close entirely, which spurred on the crisis broadcast on every news channel over the past month.
While the federal government has opted to help the banks out with their touted $700 billion bail out loan, it will take some time to see how that will trickle down to the everyday Canarsien.
Until then, local state legislators are looking toward their next session in Albany, where they can try to right some of the wrongs that have led to Canarsie’s high foreclosure rate.
Assemblymember Alan Maisel, who also attended the meeting, said that he will re-submit a bill that would allow mortgage holders to restructure two of their payments if they happen to come up short.
If someone could not pay a mortgage one month, that bill would be placed on the back of the mortgage, so their month bill wouldn’t be doubled the next month.
“I’ve been trying to get the bill passed, maybe it’ll happen this year,” he said.
Elected officials are also providing the neighborhood with needed services regarding one’s mortgage, so they don’t have to worry about foreclosure.
On December 6, officials from Comptroller William Thompson’s office will be visiting Canarsie with specialists that can help people restructure their mortgages.
These specialists will be accompanied with local bank representatives, said Bruce Solomon, a representative from Thompson’s office.
“We will not only have the people with advice on how to fix your mortgage, but we’ll also have the people holding the notes,” said Solomon. “We want to do whatever we can to restructure your mortgage so your family is not disrupted.”
Sampson said that for the last few months, many meetings have been held about how one can restructure their mortgage. But he’s unsure if the right people are getting the message.
“We’ve held the forums, but we always get the same fifteen to twenty people,” he said, adding that this is the right time for someone to restructure their mortgage.
“The banks are taken everything they can get,” Sampson said. “People shouldn’t be embarrassed about going out and getting help. They should be embarrassed about possibly living on the street.”
