Thousands of Homeowners to be Left Helpless by Loss of Foreclosure Prevention Funding

New York, NY, November 21, 2011 — Today elected officials, including New York State Senators Jeffrey D. Klein, Eric Adams, Adriano Espaillat, and Diane J. Savino, Assemblymembers Guillermo Linares and Francisco Moya, City Councilmember Julissa Ferreras and non-profit housing counseling and legal services organizations held a press conference on the steps of the New York County Supreme Court to call for continued funding for foreclosure-prevention housing counseling and legal services. The cost-effective state program that provides those services will run out of funding at the end of this year.

(Above, State Senators Adriano Espaillat and Jeffrey Klein, Assemblymember Francisco Moya, Staten Island Legal Services client Jose Perez, and City Councilmember Julissa Ferreras)

Media Coverage: New York Magazine, PolitickerNY.com, WNYC.org

The State, like much of the rest of the country, remains embroiled in a
foreclosure crisis that began as a result of predatory lending practices
but has now ballooned with the economic crisis and massive loss of jobs
in the State since 2009. Advocates seek $4.8 million to keep New York
State Homes and Community Renewal’s Foreclosure Prevention Services
Program running through 2012 and $25 million to operate the program for
2012-13. 

As of March 2011, nearly 250,000 homeowners of owner-occupied 1-4 family
homes were in foreclosure or serious delinquency. This foreclosure
crisis has devastating effects on communities across the State.
Abandoned homes and neighborhood blight create magnets for crime and
severely depress nearby home values, affecting not just the homeowners
and their tenants whose homes are lost to foreclosure, but communities
as a whole, as local tax bases are degraded and municipalities are left
with reduced revenues available to keep local government functioning. 

In response to the crisis, New York State funded a vital foreclosure
prevention program in 2008, at the same time that it established a
mandatory settlement conference process so that all homeowners in
foreclosure would have an opportunity to negotiate a resolution with
their lenders. The NYS Foreclosure Prevention Services Program forged a
remarkably effective collaboration between legal services providers and
housing counselors across the State providing direct foreclosure
prevention assistance to distressed homeowners.  As a result, New York
has one of the best success rates in the country for achieving loan
modifications that prevent foreclosure and preserve affordable housing. 

Over four years, $50 million was appropriated for housing counseling and
legal services providers across the State to provide these crucial
foreclosure prevention services. With this modest investment, to date,
over 80,000 homeowners have been assisted and at least 14,000 homes have
been saved from foreclosure. This translates to over $3.4 billion in
property value and tax bases preserved, and a return of $68 for every
dollar invested in the program—a dramatic savings in this time of
austerity budgets.  This funding expires on December 31, 2011, while
best estimates suggest that we are, at most, about 1/3 of the way
through the foreclosure crisis. Without continued funding, many programs
around the state will be forced to shut their doors, leaving homeowners
to fend for themselves in a complicated and often overwhelming process.
Without advocates, homeowners won’t be able to preserve their rights in
court or to obtain loan modifications from the banks that are
foreclosing on them, home loss will increase dramatically, and the
state’s economy will decline further.

Albert Areizaga and his family have lived in his Brooklyn home for more
than 15 years. Due to his wife’s serious illness and his loss of
employment, he fell behind in his mortgage payments. For years, Mr.
Areizaga tried to obtain a loan modification but was repeatedly denied. 
On the eve of a foreclosure auction, he contacted South Brooklyn Legal
Services (a program of Legal Services NYC) for assistance. South
Brooklyn advised him about how to stop the foreclosure sale, and
ultimately helped him obtain a loan modification that saved his home
from foreclosure.  Said Albert Ariezaga at the conclusion of his
testimony, “For years we lived in fear of losing our family home. Now we
feel secure, and we love being part of our neighborhood and part of our
community. We are so grateful for the help that South Brooklyn Legal
Services provided; I don’t know where we would be without it.”

"Without the legal representation and homeowner counseling made possible
by NYS Foreclosure Prevention Services, thousands of homeowners in
foreclosure will lose their homes," said Jennifer Ching, Project
Director of Queens Legal Services (also a program of Legal Services
NYC). "Our programs work closely together to ensure homeowners aren't
lost in the maze of complicated financial and legal issues and to
protect our communities from the destabilizing effects of the
foreclosure crisis."

“Navigating one’s way through the complexities to obtain a mortgage
modification or other resolution is impossible for many homeowners and
requires the skills, tools, knowledge and doggedness of trained housing
counselors,” said Hilary Lamishaw, coordinator of the NeighborWorks
Alliance of NYS, representing twenty-two NeighborWorks-affiliated
housing counseling agencies across the state. “Many homeowners seek the
assistance of housing counselors only after months of unsuccessfully
trying to deal with their lenders or servicers directly. Additionally,
by working with homeowners to determine their financial situation,
housing counselors are able to help them find the best available option,
which is key to resolving foreclosures.”

Primary Contacts:

• NYC/Legal Services: Meghan Faux, South Brooklyn Legal Services: (718) 755-0701
• UPSTATE/Housing Counseling: Hilary Lamishaw, NeighborWorks Alliance of NYS: (518) 527-1474   

Regional Contacts:

• Bronx: Justin Haines, Bronx Legal Services – 646-496-3803
• Capital Region: Hilary Lamishaw, NeighborWorks Alliance of NYS (based in Troy): (518) 527-1474
• Long Island: Eileen Anderson, CDC of Long Island – 631-471-1215 x145
• Manhattan: Elise Brown, MFY Legal Services, Inc. – (212) 417-3753
• Rochester: Rebecca Case-Grammatico, Empire Justice Center: (585) 295-5725