FOR IMMEDIATE RELEASE Nov. 25, 2008
SPANO CALLS ON LOCAL BANKS TO FREEZE FORECLOSURE ACTIONS FOR 90 DAYS
Asks that they then work out new payment plans to keep people from losing their homes
With foreclosures up almost 60 percent in Westchester from a year ago, County Executive Andy Spano has called on local banks to voluntarily put a 90-day freeze on future foreclosures and work with residents to find ways to help them stay in their homes.
While the county government has attempted through the “Don’t Borrow Trouble Program” to counsel those residents hardest hit, more must be done, Spano said, due to the enormity of the problem.
In letters to 23 banks, Spano said that Westchester County families are being directly impacted by the nationwide housing crisis, the serious downturn on Wall Street and the decline of the economy in general.
“I strongly urge your bank to take immediate action to help homeowners stay in their homes in Westchester County,” Spano said in his letter. “…Rising mortgage defaults only exacerbate the credit crisis and are in no one’s best interests, including the banking system.”
Spano noted that a number of banks on the national level (such as Bank of America, J.P. Morgan Chase and Citigroup) have announced programs to try to help modify in-trouble mortgages. He called for the local banks “to the fullest extent possible, negotiate agreements that will keep people in their homes.”
There were 2,431 foreclosure filings and foreclosure judgments in Westchester over the last year, an increased of 58.7 percent. At the same time, unemployment in Westchester was at 5.3 percent as of September (the highest it has been in 15 years), compared to 3.6 percent a year ago. For October, the figure dipped slightly to 4.9 percent.
In asking that banks renegotiate terms of some loans, Spano urged them to freeze all foreclosure actions for 90 days. “During the period of such a moratorium, I would also urge that your bank work diligently with
HUD-certified housing counseling agencies who are now assisting at risk homeowners in assembling and organizing their paperwork.”
This will also give time for the Obama Administration to take office so it and Congress can put in place “a broader and more comprehensive plan to resolve the national housing crisis.”
Spano noted that the county will continue to work with the federal “Don’t Borrow Trouble” program, to help those residents hit the hardest to find help. Since launching the program more than 18 months ago, county staff has worked with non-profit agencies to counsel those residents hit the hardest.
“Our three HUD-certified housing counseling agencies have all seen a tremendous increase in calls for assistance, and they have all been successful in applying for and receiving grant funds to provide additional counselors to manage the increased caseload,” Spano said. “But their counseling isn’t enough if these counselors can’t get through to the appropriate personnel in your bank to review a possible loan workout.”
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Text of letter
I am writing to you on an urgent matter on behalf of the residents of Westchester County. As you are well aware, foreclosures are up nearly 150% nationally from two years ago.
While other areas of our country were hit first, Westchester County families are now being directly impacted by the sub-prime lending crisis as well as the serious downturn on Wall Street and in the financial industry generally. There were 2431 foreclosure filings and foreclosure judgments increased 58.7% in Westchester during the one year period ending October 31, 2008. Westchester is not immune to the economic crisis around us. In fact, according to the latest figures, our unemployment rate as of September was 5.3%, the highest it has been in 15 years. Last year, at this time, the rate was 3.6%.
Given the impact of unemployment on individuals’ ability to pay their mortgages, I strongly urge your bank to take immediate action to help homeowners stay in their homes in Westchester County. As you know, over the last few months, agencies of the federal government and a number of banks, such as Bank of America, J.P. Morgan Chase and Citigroup, have announced programs to try to help modify loans. I think most would agree that rising mortgage defaults only exacerbate the credit crisis and are in no one’s best interests, including the banking system.
For that reason, I urgently request that your bank, to the fullest extent possible, negotiate workout agreements that will keep people in their homes. While I acknowledge that there is no “one size fits all” solution to this problem, I urge your firm to be creative.
However, given the number of individual workout agreements that must be negotiated, the recently announced staff reductions at a number of major banks and the closing and/or staff reductions at mortgage servicing firms, action must be taken to forestall foreclosure, until such workouts can be arranged. I am asking you to hold up
foreclosures until, as anticipated, early next year when the new Administration, together with Congress, will put in place a broader and more comprehensive plan to resolve the national housing crisis. To the extent that current laws and regulations need to be amended that will keep people in their homes, I will urge the county’s legislative delegation in Washington to take any and all action necessary to achieve this critical goal.
Accordingly, I urgently request that your bank, if it has not already done so consider a moratorium on foreclosures for 90 days in Westchester County. During the period of such a moratorium, I would also urge that your bank work diligently with HUD certified housing counseling agencies who are now assisting at risk homeowners in assembling and organizing their paperwork, so they will be prepared for a workout negotiation.
Since we initiated the federal “Don’t Borrow Trouble” program, county staff has been working with these agencies, sponsoring large meetings with our hard hit residents where they are provided with information on the resources available in the county to help them. Our three HUD-certified housing counseling agencies have all seen a tremendous increase in calls for assistance, and they have all been successful in applying for and receiving grant funds to provide additional counselors to manage the increased caseload. But their counseling isn’t enough if these counselors can’t get through to the appropriate personnel in your bank to review a possible loan workout.
I know you share my concern about our residents and our county. Especially with the holiday season approaching, I ask that you please take into consideration, the impact that proceeding with foreclosures will have on families living in Westchester County.
Thank you.