Staten Island Leads City in Rate of Foreclosures

PropertyShark.com last week reported that Staten Island led
the city in the rate of foreclosures in the third quarter,
and continued to post the highest percentage of foreclosures
per household among the five boroughs. Staten Island Legal Services (a program of Legal Services NYC) represents many of the families facing the potential loss of their homes. An article in the October 3rd issue of the Staten Island Advance takes a closer look.

Jonathan Peters, associate finance professor at the College
of Staten Island, said the bailout is likely to focus on
freeing up clogged credit markets first and struggling
homeowners last.

"When a firefighter shows up at your house you
don't want to discuss how the fire started, you want to
put out the fire out," he said. "There is a lot of
concern that we will put out the fire and there won't
be the kind of changes we want to see in terms of reforms in
the system."

Margo Albert, an attorney with the Homeowner Defense
Project at Staten Island Legal Services in St. George, which
represents hundreds of Islanders in foreclosure, shares
those worries.

Ms. Albert said many Islanders got into trouble by taking
complex option adjustable rate mortgages, also known as
option ARMs or "pick a payment loans."

The mortgages typically offered very short-term, low teaser
rates and initial mortgage payments that barely covered the
interest on the loan. When those loans reset to higher
interest rates and payments including principal and
interest, homeowners saw their monthly payments double or
triple. She said brokers and "smooth-talking
professionals" often marketed those mortgages to people
who didn't understand them.

"Option ARMs are the most complicated mortgage
products I've ever seen," the attorney said
yesterday. 

Read the full article in the Staten Island Advance.

Through our Foreclosure Prevention work at Staten Island Legal Services, South Brooklyn Legal
Services, Legal Services NYC-Bronx,
Brooklyn Legal Services Corporation A, and the Legal Support Unit,
Legal Services NYC is at the forefront of the national fight against
predatory lending practices in the subprime lending market.  Predatory
lending practices lead to foreclosure, homelessness, financial
devastation and loss of hard-earned home equity (the sole source of
wealth for many lower income homeowners), displacement of long-time
residents, and destabilization of neighborhoods.  Legal Services NYC's
work includes providing legal assistance to homeowners, including
advice, advocacy and litigation services; advising community-based
organizations concerning specific cases; and helping to coordinate and
provide training for foreclosure prevention attorneys and advocates
throughout the City.