New York Launches New Foreclosure Avoidance Program… Hundreds Could be Saved?


Just a few days ago, New York’s Attorney General Eric T. Schneiderman announced the launch of a new New York State Mortgage Assistance Program (“NYS MAP”), which will make loans of up to $40,000 available to homeowners who are struggling to avoid foreclosure.

The NYS MAP program will be available in Long Island only starting on September 15th, and elsewhere in the State of New York as of October 15th.  According to the AG’s press release, Long Island was chosen for the one-month-early launch because the area was recognized as having been “particularly devastated by the foreclosure crisis.”  (Here’s a copy of the press release en Español, just in case.)

Wow… I can’t help but say something here… although I’m not sure what, exactly.  The whole thing sort of takes your breath away, doesn’t it?  Is it warm in here? 

Talk about feeling conflicted.  Part of me wants to throw up, that feeling I recognize for sure, but another part of me either wants to run screaming into the wilderness where I can learn to make crystal meth, or some other useful craft… or make my way to Chi-raq to kick the Holy crap out of CNBC’s Rick Santelli… on camera and with a soundtrack, if possible. 

Good Lord… only four paragraphs in, and I’m already regretting having started writing this piece.  So, let’s just make one thing clear… it’s mid-way through 2104.  That’s all… just keep the date straight… 2014, okay?

The NYS MAP program has been designed to help more families get their loans modified.  Are you ready for the accompanying explanation?  I bet not, but here it comes anyway, as quoted from the AG press release…

“In the course of its work mitigating the damaging effects of the housing crisis in New York State, Attorney General Schneiderman’s office discovered that many families are being denied mortgage modifications as a result of small outstanding debts. 

Even families with reliable income streams are denied modifications due to things like a series of missed mortgage payments, delinquent second or third mortgage liens, or unpaid property tax bills which need to be satisfied before a first mortgage holder will grant a modification.  By filling the gap for families, the NYS MAP program will empower consumers to negotiate with their mortgage holders and ultimately remain in their homes.”

Okay, so two quick questions… how long did it take the AG’s office to “discover” this?  And, has anyone seen a loan mod declined based on any of those reasons as the cause of the denial?  I mean, “a series of missed mortgage payments,” sure.  That could mean “haven’t made a payment since Bush was in the White House.”  But, “delinquent second or third mortgage liens, or unpaid property tax bills?”  I’m not sure I’ve ever bumped into any of those reasons in the letters explaining why a loan modification was denied.

I’m not saying Schneiderman’s office is wrong, I’m just asking the question.  And assuming the NY AG is right, I can’t help but wonder just how many loan mods have been denied because of, “delinquent second or third mortgage liens (presumably underwater), or unpaid property tax bills?”  Because if there are any significant number that fall into this category, shouldn’t someone be at least fired, if not publicly stoned.

Again from Attorney General Schneiderman…

“For many families across New York State, receiving a small loan through this program will mean the difference between a mortgage modification and the loss of a home.  It’s hard to imagine a better investment in communities and families still feeling the effects of the housing crisis.”

Yeah, you know those out of the way places still reeling from that pesky old foreclosure crisis like Long Island, NY.  And this really does represent some innovative thinking does it not?  How do you stop foreclosures?  Give people money they can give to banks.  Why in the world didn’t I think of that back in… wait… what year is it again?

Well, regardless… Long Island has nothing to complain about now.  It may have been “particularly devastated by the foreclosure crisis,” according to the state’s AG, but hey… it got the one-month jump on the rest of the state as far as this breakthrough foreclosure prevention program is concerned, so time to stop whining Islanders.

Loans made under the program can, among other things, be used to pay off or down arrearages, unpaid interest and fees, second and third mortgages, or to pay property taxes or other liens “that might lead to loss of homeownership.”  The amounts will also provide qualified borrowers with “matching funds” intended to help borrowers get principal reductions or other “beneficial first lien modification terms.”

Consumers will be able to apply for loans of up to $40,000 per borrower, and in all cases, a NYS MAP Loan must prevent a foreclosure from happening at the time of the loan’s origination, so there’s at least some success baked into the the program right there.  And AG Schneiderman says the program will provide several hundred NYS MAP loans over the next 18 months.

Excuse me? I don’t think I heard that last part correctly… how many of these foreclosure saving loans are we talking about originating over the next 18 months?  Several… what… hundred?  Not thousand?  Hundred?  Couldn’t we save hundreds with a Concert in Central Park and a few dozen bake sales?  

So, let’s see… according to a RealtyTrac foreclosure market report, there were 4,027 foreclosure filings in the State of New York in May of 2013, which represented a year-over-year increase of 14 percent.  The state also saw a 95 percent spike in scheduled foreclosure auctions in May of last year, with 508 properties statewide scheduled for foreclosure auction, up 21 percent from the prior year.  Scheduled foreclosure auctions also saw a year-over-year increase of 174 percent in Brooklyn, which is exactly the sort of gain that absolutely screams out: stability, in a young housing market like Brooklyn.

And RealtyTrac’s Daren Blomquist, in perhaps the most obnoxiously insensitive remark since homeowners were described as “foaming the runway,” by former Treasury Secretary Tim Geithner, said… “The pig is starting to move through the python in terms of rebounding foreclosure activity in New York.  May provided early evidence that these foreclosure starts are now moving through the process and being scheduled for a public foreclosure auction.”

Oh, yay… Derwood does seem to enjoy the prospect of public auctions, doesn’t he?  Personally, I’d like to see him go up for public bid… I’d like to take him home for a weekend for some sensitivity training with a curling iron, a large tub of ice water, some lemon juice and about 1,000 fire ants, if they’re handy.  I’m confident I’d be able to get his pig through his python by Monday.

The thing is that as of February of this year, Business Insider reported that the latest Mortgage Bankers Association data showed that, “11.8 percent of New Jersey’s loans in foreclosure are seriously delinquent.”  Now, I can’t claim to know what that means, exactly… but the number put New Jersey in the top spot nationally (Florida had to settle for first runner up), and New York came in third at 9.11 percent.

In New York specifically, foreclosures were up 13.6% on the month in January 2014 and up 31% on the year, so whatever pig is supposedly moving through a python, all I can assume is that we’re talking about a snake the size of Kazakhstan.

Not to worry, however, because over the next 18 months, perhaps as many as several hundred NYS MAP foreclosure prevention loans will have hit the streets of the Empire State, and well… that should cover it… I think that much is clear.

To apply for a NYS MAP loan, New York homeowners will need to work with an Homeowner Protection Program (“HOPP”) counselor or legal aid provider, but breaking with the tradition established by the Obama Administration, the Attorney General’s office has already launched the program’s website:, so those considering applying for assistance under the program can learn more and even connect to a HOPP lawyer or counselor as of now, even though they can’t actually apply until Fall.

Alternatively, consumers with questions are also being directed to contact the New York Attorney General Consumer hotline at 855-HOME-456. 

Understandably, many are hoping to see the NYS MAP program expanded.

On a regional basis, Long Island has the highest distressed mortgage rate with loans that are 90 days or more delinquent but not yet in foreclosure… across New York State it’s 11.1%, but some communities on Long Island have strikingly higher delinquency rates.  Brentwood and Hempstead were both mentioned specifically in the AG’s press release, and with over 90-day delinquency rates at 24% and 28%, respectively… they’re both just screaming recovery and rebound all over the place.

Other areas across the State also continue to suffer under the crushing weight of the ongoing foreclosure crisis, and homeowners in such areas are planned for program eligibility later this year. In the Hudson Valley, for example, the AG’s press release said distressed mortgage rates in Newburgh and Spring Valley are at 16%, and Middletown is at 19%.

Also mentioned as communities facing extreme problems with distressed home loans across upstate and Western New York, were Troy at 9 percent, Rochester at 7 percent, and certain neighborhoods in Buffalo, such as Kensington at 10 percent.  The AG’s release also mentioned that “Erie County has the fifth highest distressed mortgage rate in New York State and Monroe County ranks the eighth highest for mortgage distress.”

What made reading all of that absolutely painful and embarrassing proof of our national mishandling of foreclosures worth it was how the NY AG’s office characterized the whole problem as being “concentrated in certain communities.”  Like saying something only happens on days that end in “y”.

As Schneiderman said…

“We know that our Homeowner Protection Program has had real results, helping thousands of families keep their homes. I’m pleased to announce that the Mortgage Assistance Program will go even further, providing a lifeline to families still in need.”

Yep, and maybe even hundreds of them.  It makes me all misty.  I swear, I don’t know what I’m gong to do for anger, exasperation and absolute weariness once this foreclosure crisis is finally over… let’s see… I’m 53… so maybe by then my nursing home will throw me out onto the street.  See, there’s always a silver lining to be found somewhere, you just have to know where to look.

Christie Peale, Executive Director of the Center for NYC Neighborhoods said in the release…

“Despite reports of an improving housing market, communities all over New York are still struggling from the impacts of the housing crisis, and homeowners are still fighting every day to keep their homes in the face of foreclosure. Thankfully, these loans will keep hundreds of families in their homes and in their neighborhoods.”

Yeah, thank God for those hundreds of families that have a shot at saving their homes from foreclosure by this loan program… wait… what year is it again?  2104?  Are we sure that’s right, because I’m starting to think there’s something very wrong gong on.  Either we’ve just become fine with abysmal results from government programs, or maybe we’re stuck in some sort of 2009-10 time warp.

New York City’s Department of Housing Preservation and Development Commissioner Vicki Been had the following to say about the new program…

“For homeowners facing foreclosure a NYS MAP loan can provide the extra financial assistance they need to bridge the gap to a successful workout or mortgage modification.  The city’s Mortgage Assistance Program has already helped more than 170 New York City homeowners stave off foreclosure.”

And Marianne Garvin, President and CEO of the Community Development Corporation of Long Island chimed in saying…

“The NYS MAP funds will provide a safety net for eligible homeowners and will serve as a critical tool for counselors to assist families in obtaining an affordable payment and home-ownership retention.  We are privileged to be part of the network of providers under the New York State Attorney General Homeowner Protection Program (HOPP) and value Attorney General Schneiderman’s ongoing commitment to New York.”

See what I mean when I say we’ve become fine with even the marginal levels of performance by our government officials?  Marianne Gavin above just said she, values Attorney General Schneiderman’s ongoing commitment to New York.”

Memo to Marianne… Eric Schneiderman is the State of New York’s Attorney General.  You don’t need to value his “ongoing commitment to the state.”  His ongoing commitment to the state that pays him would seem the price of admission to becoming a state AG.  He’s required to have at least that, wouldn’t you think?  What’s he going to do otherwise, start pitching for Ohio?

What’s next?  Thank you President Obama… for your ongoing commitment to this country?  Thank you for not committing treason and placing Americans in harms way for your own personal gain?

Okay, I’ve had enough of this.

People… it’s 2014! 

The foreclosure crisis started in 2007… actually during the third quarter of 2006, but I’m willing to concede and even forgive our complete stupidity right up through 2008, how’s that?  But, it’s 2014… 2014… 2104… and nothing anyone in our government has said since then related to the foreclosure crisis has come anywhere near true.

At least six years since we started botching everything we touched while watching almost eight million American homeowners lose homes to foreclosure.  And now we think $40,000 loans might do the trick.  Do you know how many trillions our economy has lost over the same period of time?  And all we needed to save New York was to be handing out a few hundred $40,000 loans.  Couldn’t Mayor Bloomberg have covered that sort of expense out of his personal checkbook and wait to be reimbursed?

It’s not over… it’s not better… and it’s sure as hell not the least bit funny that we’re now appreciative when one of our elected leaders doesn’t end up getting caught cruising for gay sex in an airport bathroom.

All I can think of to say is: Illegitimi non carborundum, my brothers and sisters… Illegitimi non carborundum.


Mandelman out. 




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