NYC SUB PRIME MORTGAGE - HELP IS AVAILABLE

That's a nice house
That's a nice house

New York City mortgages have also been impacted by this financial crisis, something this City hasn’t seen in years.

The sub prime loans offered to home buyers were handed to borrower with low credit score and not enough income. This was one of the outcomes that had contributed to the financial crisis that we now face. Under a sub prime loan, home buyers were offered mortgages as a return for high interest rate. And considering the under whiting conditions they knew nothing about, their interest rate jumped from 8-12% within a matter of 2 years. This has led home owners with adjustable rate mortgages to fell behind on their mortgage payments, which resulted in a default on their loan.

Most people think that mortgages are made by banks and depository institutions. In the sub prime market, that’s not the case; Mortgages are made by state charter finance companies. These institutions have no bank regulator that watches over their heads. In order for them to have been regulated, they would have to possess bank deposits.

These institutions go to Wall Street for the money to make the loan. Then Wall Street turns around and buys the loan back from them, repackage the loan into security and then sell them back to investors. Now you wondered why some of the banks didn’t want to get involve in this rotten sub prime scam. Well, it is because they new sooner or later the smell would reach their living room.

New York City mortgages have also been impacted by this financial crisis, something this City hasn’t seen in years. Folks who have fallen behind on their mortgage have had to make some very difficult decisions. They’ve now wondered if they should send their children to school or should they pay the mortgage. Since Jobs are difficult to find, home owners who have paid 65% of their mortgage, have found it necessary to suspend their child education until things get a little better.

Homes in some area, especially in the black communities have depreciated in value. Those who were thinking about selling their homes have decided to wait until the market goes back up. Some are now paying twice as much than what the house is worth. These families have found it beneficial for them to let the house be foreclosed.

New YorkState passes a law last year stating that before a bank can begin the foreclosure process, they will be submitted with a letter that will require that they have a mandatory settlement conference in the courts. That letter will also be mail to home owners who is faced with the foreclosure to appear in courts. Failure to appear in courts may cause the borrower to miss out on an opportunity to negotiate with the lender before the foreclosure is file.

Home owners who have missed between 2- 3 months payments might be facing foreclosure, they should then reach out for help by calling 311 NYC Foreclosure Prevention for assistance. Or they can contact 646 786 – 0888 a none profit organization to have someone represent them at the settlement conference with the lender.



Reference:

Pacifica.org -- subprime lending crisis with Amy Goodman

WBAI -- Talk Back with Hugh Hamilton


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