FOR IMMEDIATE RELEASENew Effort to Provide Financing Relief for New York City Seniors and Disabled Homeowners Victimized by Predatory Lenders
November 21, 2000
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The Parodneck Foundation
212-431-9700, ext. 300
NEW YORK CITY, NY -New York City senior citizens who are victims of predatory lending practices can seek relief from unreasonably high interest rates through a new $5 million initiative announced today by The Parodneck Foundation for Self-Help Housing and Community Development, South Brooklyn Legal Services (SBLS), lender partners, and Fannie Mae (FNM/NYSE), the nation's largest source of financing for home mortgages. The New York Predatory Lending Pilot will enable lenders to refinance mortgages to more affordable, lower interest rates that will allow homeowners to remain in their homes. Following the announcement, nonprofit and community organizations participated in a training session on the pilot.
"Abusive lending practices that target senior citizens and homeowners with disabilities must be stopped," said Senator Charles E. Schumer (D-NY). "I want to thank the many partners who worked together to develop this important initiative. This pilot is an important step to highlight both the barriers and the opport~nities available for seniors and families who want to participate in the American Dream ofhomeownership."
"After witnessing an unprecedented number of individuals who are victimized by predatory lenders, we joined forces with South Brooklyn Legal Services, Fannie Mae, lenders, and an alliance of strong community and housing groups to remedy the situation for our senior citizens, help preserve their communities, and stem further abuses, " said Harold DeRienzo, president of The Parodneck Foundation.
"We are pleased that nearly 25 concerned non-profit partners and community groups gathered here today to learn about the program, " said Judith Rubenstein, loan processor of The Parodneck Foundation.
The partners in the initiative include: Bank of New York, Chase Manhattan Bank, Dime/NAMCO, European American Bank~ Fleet Bank, HSBC, Neighborhood Housing Services of NYC, Neighbors Helping Neighbors, and the Pratt Area Community Council. Working with these partners, The Parogneck Foundation, SBLS, New York City Housing Preservation and Development (NYC HPD), and Fannie Mae formed a collaborative alliance to address the effects of predatory lending on elderly and disabled homeowners. The result is a pilot program that can be leveraged with available city subsidies, negotiated mortgage pay downs, and other funds.
"With the use of this pilot initiative, we will be able to assist far more seniors who are facing the loss of their homes due to predatory lending practices, " said Josh Zinner, project coordinator for South Brooklyn Legal Services' Foreclosure Prevention Project for Seniors. " As the main legal services office in the city litigating these cases, we look forward to partnering with other groups to stop these abuses. " The Foreclosure Prevention Project for Seniors, a unit of South Brooklyn Legal Services, is an integrated outreach, education, and legal service delivery program for low- income senior homeowners at risk of foreclosure, with a specific focus on abusive practices by subprime mortgage companies.
"We are pleased to assist victims of predatory lending in New York City by working with the homeowners and the nonprofit community to come to a workable solution to this growing problem," said Wesley Wainwright, senior vice president of Chase Community Development Group, Residential Lending Unit.
"NYC Housing Preservation and Development is pleased to support this effort through its Senior Citizen Homeownership Assistance Program to provide loans to low- and moderate-income seniors who own and occupy small homes, " said Jerilyn Perine, HPD Commissioner.
The New York Predatory Lending Pilot will assist up to 75 victims of predatory lending by restructuring debt.
In addition, The Parodneck Foundation has applied and continues to seek resourtes that can be .used to write down the refinanced first mortgage to make it more affordable, and to provide funds to bring properties to code and increase energy efficiency. Targeted sources include Community Development Financial Institutions (CDFI)/Bank Enterprise Award (BEA) Program funds, program-related investments, recoverable grants, and others.
- Lender partners will restructure up to $5 million in first mortgages;
- New York City's Senior Citizen Homeowner Assistance Program will provide funds to repair or rehabilitate properties; and,
- South Brooklyn Legal Services will provide legal services for at-risk homeowners and will help negotiate loan write-downs with predatory lenders.
"Fannie Mae recognizes the serious issues involved with predatory lending," said Naomi Bayer, director of Fannie Mae's New York Partnership Office. "We have an obligation to define the loans we will not buy and practices we will not support that have the effect Of encouraging predatory lending. Abusive lending practices make it difficult for elderly and disabled homeowners to achieve successful long-term homeownership. This New York Predatory Lending Pilot is an important first step to making sure that these abuses are stopped."
Fannie Mae only purchases loans originated in a responsible manner. The company recently announced new business guidelines that address responsible lending issues including borrower inability to repay, steering, excessive fees, and those prepayment penalties that prpvide no value to consumers. Fannie Mae works with its lender partners to expand the use iof responsible alternative products for low- and moderate-income borrowers, low-wealth borrowers, the elderly, minorities, and borrowers with blemished credit. Fannie Mae is committed to its Mortgage Consumers Bill of Rights Agenda, a call for housing il}dustry participa.nts to pro~ote consumer advocacy in the mortgage process.
For more information about the New York Predatory Lending Pilot and the Senior Citizens Homeownership Assistance Program, consumers may call Howard Banker, vice president for programs of The Parodneck Fou~dation, at (212) 431-9700 x. 300.
For more information about Fannie Mae, consumers may contact Fannie Mae's Consumer Resource Center at 1-800-7FANNIE (1-800-732-6643) Monday through Friday, 9 a.m. to 5 p,m. EST.
Fannie Mae is a New York Stock Exchange company and the largest non-bank financialservices company in the world. It operates pursuant to a federal cha11er and is the nation's largest source of financing for home mo11gages. Fannie Mae is working to shrink the nation's "homeownership gaps H through a $2 trillion H American Dream Commitment" to increase homeownership rates and serve 18 million targeted American families by the end of the decade. Since 1968, Fannie Mae has provided $2.9 trillion of mo11gage financing for over 35 million families. More infonnation about Fannie Mae can be found on the Internet at http;//www.fanniemae.com, Style Usage; Fannie Mae's Board of Directors has authorized the company to operate as "Fannie Mae, " and the company's stock is now listed on the NYSE as "Fannie Mae. " In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as "Fannie Mae."