Senator Charles Schumer Unveils Plan to Fight Foreclosures
Foreclosures in the Capital Region are up 200% since last year — mostly brought on by huge interest rate increases for subprime mortgage loans.
Senator Chuck Schumer says we’ve actually been fairly lucky, but that won’t last — and he says he has a plan to help.
The increases in Capital Region foreclosures range from a 63% jump in Albany County, from 32 filings last July to 52 this July, to a 2500% increase in Saratoga County, from 1 filing in July 2006 to 26 in July 2007.
The reason, according to Senator Schumer, is mortgage lenders who have gotten people into home loans they cannot afford.
Senator Charles Schumer, Democrat New York: “If someone calls you and says they’re giving you a mortgage that sounds too good to be true, it probably is too good to be true.”
Foreclosure does not happen in a bubble.
For every house that’s in foreclosure, there’s an effect on the others around it.
Senator Schumer says for every foreclosure within 1/10th of a mile of your house, your house will lose 1% of its property value.
Schumer has a 3-point plan to stop that — including putting an end to ads that do not specifically state when and how interest rates will go up on a loan, and also requiring federal licensing of mortgage lenders to keep unscrupulous ones out of the business.
He also wants brokers who issue subprime loans to chip in money to add to a $100 million fund to help people facing foreclosure that he submitted in a Senate appropriations bill.
Sen. Charles Schumer: “There’s a lot of deception that goes on and you can’t expect average folks to read the fine print and understand. It’s up to the mortgage broker. It’s up to the lender to tell them what is wrong.”
One of those caught in the web of deception is William Cook of Schenectady — who faces foreclosure after becoming disabled and falling behind on his payments.
He is getting help from a non-profit organization to keep a roof over his head.
William Cook/Homeowner in Foreclosure: “I believe they can save it. If I get my regular mortgage rate I’ll be fine.”
Now the question is — can Senator Schumer’s plan do the same for other people?
The incoming president of the New York Association of Mortgage Brokers tells Fox23 News that he agrees with efforts to get bad business people out of the industry.
He says his group fought for more than 10 years to get New York to join 47 other states in requiring licensing and continuing education for mortgage brokers.
He also says subprime mortgages are not all bad, allowing some people to own homes who otherwise could not have.