Mayor Michael R. Bloomberg and City Council Speaker Christine Quinn today announced a new not-for-profit organization, the Center for NYC Neighborhoods (CNYCN), to assist homeowners at risk of mortgage foreclosure throughout the five boroughs.  The Center for NYC Neighborhoods will be an independent entity that will fund a major expansion and coordination of counseling and referral services, legal assistance, loan remediation, preventive outreach and education, training, research and advocacy around sub-prime lending and mortgage foreclosures.  The initiative has a projected budget of $5.3 million in the first year and will assist 18,000 New Yorkers annually.  It will be the largest, most comprehensive program of its kind in the nation. Funding in the first year will include $1 million from the administration via the Department of Housing Preservation and Development and $1.8 million from the City Council. In addition to these significant public funding commitments, the City and the CNYCN planning committee are actively seeking philanthropic support and expect to raise the remainder of the funds from private and foundation sources.  The Mayor was joined at the announcement by Department of Housing Preservation and Development (HPD) Commissioner Shaun Donovan; Councilmember Erik Martin Dilan; Councilmember Lewis Fidler; Open Society Institute Trustee Herb Sturz, and Neighborhood Economic Development Advocacy Project (NEDAP) Executive Director, Sarah Ludwig.

"Thanks to the Center for NYC Neighborhoods, many worried homeowners will sleep more soundly because their most important asset will be protected," said Mayor Bloomberg.  "Homeownership hasn't only been a path to building wealth and achieving the American dream, for cities like ours, increased rates of homeownership have meant stronger, thriving communities. By helping homeowners and potential homeowners navigate the world of sub-prime loans, we are helping New York to continue to grow and prosper."

"For over 14,000 families, the devastating impact of the foreclosure crisis has hit literally too close to home," said Council Speaker Christine C. Quinn.  "In creating the Center for NYC Neighborhoods, we will set a new standard in prevention counseling and develop best practices that will help people avoid financial trouble in the first place.  I want to thank Mayor Bloomberg, HPD Commissioner Shaun Donovan, and Council Members Lewis Fidler and Erik Martin-Dilan for coming together in the fight to save the City's neighborhoods."

Although New York City's rate of foreclosures is lower than many other major US cities, the citywide rates of sub-prime and high cost loans have increased steadily in recent years, with about one in three loans originated in 2006 identified as high cost. This has led to a significant increase in foreclosure filings, particularly in certain neighborhoods such as Jamaica, Baychester, East New York and the North Shore of Staten Island.  Over the past eight months, HPD helped convene a planning group consisting of private foundations, financial institutions, federal banking agencies, community organizations and citywide not-for-profits to develop a foreclosure prevention program that will help thousands of troubled New York City homeowners. The funding raised by the Center for NYC Neighborhoods will significantly expand the counseling and legal assistance available to home owners. The Center will serve as a clearinghouse for foreclosure prevention best practices, conduct ongoing training to build capacity of local groups, and implement quality controls to ensure that New Yorkers are receiving first-rate counseling and legal services. Renters facing eviction due to an owner's foreclosure can also use the Center.  The Center will not be providing bailouts to lenders or homeowners, but the Center's partners will help assess the capacity of the borrower to pay for a home, and to identify best options for the borrower to preserve their home equity, credit, and savings, and to avoid scams, bankruptcy and foreclosure where possible.

"We are extremely grateful to the City Council and our partners for their leadership on this critical issue," said HPD Commissioner Donovan. "We look forward to working with foundations and philanthropic partners to raise the remaining critical funds for the Center. This ground-breaking partnership between government, non-profits, banks and philanthropic institutions will protect homeowners and build stronger neighborhoods. Prevention counseling, legal services and education can help keep families in their homes. A home is far too valuable an asset for people to lose."

"Our city is in high emergency alert as more and more families across the City go through foreclosure on their home loans," said City Council Housing and Buildings Chair Erik Martin-Dilan.  "We need a central organization, like the Center for NYC Neighborhoods that will treat this crisis as we would a threat to our public safety.  We need to protect our families and neighborhoods from predatory loans by making people with knowledge in the field available to all New Yorkers."

"I am gratified that the Administration has seen the merit of the Council's initiative and is working to forge an even better network of assistance for homeowners in crisis," said Council Member Lewis A. Fidler.  "Hundreds of New Yorkers were helped because we had this safety net in place before the crisis hit. Now, with the help of the Bloomberg Administration we will be able to meet the needs of many thousands more."

"We face a foreclosure crisis in New York City, which is affecting not only tens of thousands of New York homeowners but also entire neighborhoods where subprime lending and foreclosures are most heavily concentrated," said Sarah Ludwig, Executive Director of the Neighborhood Economic Development Advocacy Project (NEDAP), a member of the planning group that designed the city-wide foreclosure prevention initiative.  "The funding commitments announced will help thousands of aggrieved New York City homeowners avert foreclosure and avoid abusive subprime lending practices, and will help protect the city's neighborhoods and overall economy."

New Yorkers will be able to access the services of the Center for NYC Neighborhoods by dialing 311, the City's customer service center, as well as through direct walk-ins to participating community-based organizations.  The Center will be governed by a Board of Directors, consisting of representatives from government, philanthropic institutions, the lending industry, academia, community based organizations and community leaders.

The initiative announced today builds on the success of a pilot anti-predatory lending program, "Preserve Assets and Community Equity" (PACE) launched by the Mayor in October, 2005, and the City Council Predatory Lending Initiative.  During its first 18 months, the PACE program provided comprehensive one-on-one counseling services to 1,052 clients, and provided preventive information to thousands more through community forums and education sessions.  Through this same time period, PACE helped 104 homeowners obtain or save an estimated $26 million of home equity and new loans.