By Mary Frost
Foreclosure prevention orgs lack funds to meet demand
As real estate values in Brooklyn have gone through the roof, homeowners in gentrifying black and brown communities in the borough are increasingly being targeted by housing predators, legislators were told on Friday at Brooklyn Borough Hall.
Residents and housing experts testified at a standing-room-only hearing that homes worth millions of dollars are being systematically stolen through deed theft, liens for minor unpaid bills, fraudulent documents, predatory foreclosures and HPD’s Third Party Transfer (TPT) program.
Bedford-Stuyvesant, Crown Heights and East New York have some of the highest rates of real estate fraud, along with Canarsie and Flatlands, legal advocates said.
The hearing was sponsored by Brooklyn Borough President Eric Adams, State Senator Velmanette Montgomery and Assemblymember Tremaine Wright, and was joined by numerous elected officials, including State Sen. Brian Kavanagh.
Julie Howe, senior staff attorney for the Foreclosure Prevention Project at the New York Legal Assistance Group, said foreclosures in Brooklyn “are at their highest level since 2009, and as a result, homeowners are desperate for assistance.”
The mood in the packed courtroom at times resembled a Sunday service, with audience members affirming and responding to emotional statements made by speakers. Former owners testified tearfully that they were made homeless after losing property that had been in their families for generations.
Getting a home back takes years
tate Sen. Montgomery said minority homeowners often don’t know who to turn to when in crisis, and urged the many foreclosure experts present to propose solutions.
Catherine Isobe, senior staff attorney at Brooklyn Legal Services, the largest provider of legal foreclosure services in the county, said that funding for the Communities First Network was “absolutely crucial.”
“We cannot meet the need of affected homeowners,” she said. “I checked yesterday and we had about 6,000, if not more, foreclosures pending in Kings County and more are on the way … We have a huge number of pre-foreclosure notices filed. We can’t help everyone with the resources we have.”
Isobe also said that amendments to real property law concerning deed theft, which passed in the Assembly, needed to go forward.
“You know when someone steals your car and they get caught, they give it back to you. But when someone steals your home, they don’t give it back to you. You have to go to court. You have to hire a lawyer. Affirmative litigation to try to get someone’s home back takes years and years,” she said.
Sarah Ludwig, founder and co-director of the New Economy Project, which works with community groups to promote community-led economic development, said 167,000 pre-foreclosure notices were sent out in New York State in 2017.
“Out of the whole state, nine out of 10 of the most affected zip codes are in New York City, and [prominently] Canarsie, Flatlands, etc,” she said.
Ludwig said the State Senate had cut funding for foreclosure prevention services, from $20 million to $12 million, while the Assembly is still budgeting $20 million.
“We cannot cut back funding. It would be devastating to go below $20 million, which is not in itself enough,” she said.
She also urged the legislators to fund community based financial institutions known as CDFIs. These funds serve low-income people and banks in areas that traditional banks have historically failed to serve.
“In 2007 New York State started a fund for funding CDFIs, and not one penny has been put in that fund for 12 years. Please fund the CDFI fund. It’s a very simple, bang for buck sort of thing,” Ludwig said.
Ivy Perez, senior policy and research associate at the Center for NYC Neighborhoods, which promotes affordable homeownership in New York, said that allowing the $20 million in annual foreclosure prevention funding to expire would be a serious mistake, given the extent of the crisis.
There were so many individuals and groups testifying — 18 representatives of advocacy, civic and legal organizations alone — that speakers frequently went over their three minutes and had to be talked off the podium by Brooklyn Borough President Eric Adams.
“We know this is a passionate issue. What we want to do is to be thorough,” he said as he asked witnesses who were cut off to leave their written testimony off with officials.
The offices Montgomery and Wright, with support from Adams, will be compiling the submitted testimony and use it to guide budget negotiations in Albany as well as identify new legislative avenues to strengthen homeowner protections, a Borough Hall spokesperson said.
After hearing testimony from numerous former homeowners in November, Adams and Councilmember Robert Cornegy called for a “full-scale forensic audit and investigation on the federal, state and city levels.”
The borough president says his office was witnessing “serious red flags with HPD’s TPT program.” The Department of Housing, Preservation and Development’s Third Party Transfer (TPT) Program designates sponsors to purchase and rehabilitate distressed vacant and occupied multi-family properties. HPD says it does this “in order to improve and preserve housing affordable to low- to moderate-income households.”
Some homeowners, though, say they’ve lost possession of their home over technicalities such as late water-bill payments.