NY Remediation Program
New York Citywide Remediation Project
Several years ago, Parodneck Foundation staff noticed that an increasing number of SCHAP applicants were ineligible for loans because they were badly in debt and/or their homes were being foreclosed upon. We soon discovered that predatory lenders had been defrauding vulnerable seniors into accepting expensive loans they could not possibly pay back. We worked with South Brooklyn Legal Services (SBLS), FannieMae and several NYC banks to develop a new program. Our New York Remediation Project now arranges to have the debts of individuals who have been victims of predatory lending practices written down (when possible) and restructured into a new, affordable loan, so the danger of default and foreclosure is averted. Through the SCHAP program, we also provide seniors with home improvement loans to carry out necessary repairs.
This project included our recent two year participationas a lead partner in the PACE (Preserve Assets and Community Equity) program which targeted four specific neighborhoods and which was coordinated by the City's housing department, HPD. It was a consumer education, legal services, referral and financial services program geared towards rooting out predatory lending in specific targeted neighborhoods and zip codes. It began to create or enhance the infrastructure to serve those who were eligible for prime loans and honest credit mechanisms; prepare others; and assist actual victims of predatory lending. The program used a very wide variety of outreach methods as well as supplementary staffing and capacity building funding for local CBOs, many of which were our local partners. The PACE Program has just recently ended.
We were also the lead manager in a City Council initiated project, the Mortgage Foreclosure Emergency Prevention Project (MFEPP), which operated in seven selected neighborhoods. In its first year, Parodneck, again in conjunction with SBLS and the Neighborhood Economic Development Advocacy Project (NEDAP), served as leads in formally training seven CBOs. During 2007, the program was expanded to thirteen CBOs. MFEPP educated homeowners about the dangers of the increasing prevalence of "innovative" mortgage products that provide homeowners with initial affordable monthly debt service payments which then collide with the reality of a deflation or leveling of values in the housing market. One of the program's outcomes was a very informative DVD, available for a nominal cost or viewable on our website. The DVDs are the recorded sessions held in Harlem: one on topics particularly relevant to homeowners and the other on topics particularly relevant to HDFCs.
See the Mortgage Foreclosure Emergency Prevention Program (MFEPP) video.
While these two City-funded programs in selected target neighborhoods — PACE and MFEPP — have just recently ended, our Citywide Mortgage Remediation Program continues amid dramatically increased demand for our services. Thus the current mortgage foreclosure crisis has indicated that these programs will be replaced by and indeed enhanced by others from such diverse agencies as the new Center for New York City Neighborhoods, the State of New York Mortgage Agency, the New York State Banking Department and others.
How the New York Citywide Remediation Project Works
The New York Remediation Project connects victims of predatory lending with legal services organizations that attempt to reduce the victims debt through legal action and negotiation. It then works with qualified homeowners to create a financial package that reduces the homeowner’s debts to an affordable level, rehabilitates rental units in their homes to maximize their income, and ensures that the homeowners homes are safe and habitable. These packages include grants and loans provided through the SCHAP program and gap financing provided by financial institutions. The remaining debt is restructured by commercial lenders pursuant to new Fannie Mae underwriting guidelines.
THE NEW YORK CITYWIDE REMEDIATION PROJECT
121 Sixth Avenue, Suite 501
New York, NY 10013