Public Employee Press

2nd in a series

Subprime Mortgage Crisis
Foreclosure fighters

Dedicated workers at the Commission on Human Rights counsel victims of the housing crisis sweeping the country.

By GREGORY N. HEIRES

A group of DC 37 members at the City Commission on Human Rights are on the frontlines in the fight to help victims of the mortgage crisis, which is sweeping the country.

“You have the American dream turning into the American nightmare,” said Human Rights Specialist Robert W. Tilley, who provides mortgage counseling at the agency’s Queens Community Service Center. “People are becoming financially ruined only one year after purchasing their homes.”

HRS Isaac Parsee estimates that his workload has doubled because of the tidal wave of troubled homeowners flocking to his office.

Shaking his head as he gazed at his schedule during a September interview, Parsee pointed out that he was booked solid with clients through late October. He sees up to nine people a day.

Queens is the borough hit hardest by the mortgage crisis. Foreclosure filings jumped by 126 percent between July 2006 and July 2007. Overall, foreclosures in the city are up by 55 percent over the past year.

“The demand for counseling is very high,” Parsee said. “We are getting calls all day.”

The Human Rights Commission has a Community Service Center in each of the city’s five boroughs. Six members of Amalgamated Professional Employees Local 154 provide assistance to homeowners who face foreclosure.

In most instances, the counselors can help home-owners save their property by working out new payment schedules or refinancing, according to Parsee and Tilley.

Unscrupulous lenders
When homeowners call for help, the counselors ask them to come to appointments with their loan documents and household budget information. Usually, it’s apparent that the clients assumed too hefty a loan.

In some cases, the counselors work directly with the clients to resolve their cases. In other instances, they refer them to outside agencies. If it appears the clients were victims of predatory lending, counselors help them find attorneys.

But the work goes beyond providing technical assistance and negotiating with lenders. The Local 154 members also help unemployed clients find jobs, offer tips on household budgeting and suggest ways to cope with the tension brought on by the financial crisis.

“We keep a box of Kleenex on hand,” said Parsee, who noted that many clients break down in tears.

“The other day, I had to do some marriage counseling,” Tilley said. “The couple needed a kind of Dr. Phil type person to serve as a buffer between them because the mortgage problem is putting a strain on their marriage.”

As they described their work aiding victims of the subprime mortgage crisis, Parsee and Tilley exhibited a sense of moral outrage over how unscrupulous lenders take advantage of working families, minorities and immigrants. Lenders do this by convincing people to purchase homes they can’t afford, engaging in predatory practices and keeping buyers in the dark about the terms of their loans and mortgage obligations, they said.

The deregulation of the mortgage industry over the years has allowed lenders to entice low-income families by offering loans requiring no income verification or down payments and offering interest-only payments (at first) or “teaser rates” that soon convert to higher payments as alternatives to traditional fixed-rate mortgages.

A client of Parsee’s who is trying to avoid foreclosure on a three-family home described how she felt intimidated as she was rushed into a predatory interest-only loan of over $700,000. The lender provided the attorney, and she wasn’t even told her monthly payments.

Such “one-stop shopping” in which naïve buyers take out loans without their own representation occurs all too frequently, Parsee said. This conflict of interest could be avoided if government required potential homeowners to get pre-mortgage counseling, he said. (Henry Garrido, DC 37’s assistant to the associate director, said the union included pre-mortgage counseling in its affordable housing program to make sure potential homeowners are fully aware of the financial responsibility they will be assuming.)

Local 154 President Juan Fernandez said that the Human Rights Commission should beef up its counseling staff because of the growing workload and the expected rise in foreclosures. He also said the commission should devote greater resources to analyzing the discriminatory impact of predatory lending and other mortgage practices on people of color and the elderly.

“The important work our members do keeps the community informed about the danger of predatory lenders pushing loans with onerous mortgage obligations,” Fernandez said. “This crisis isn’t going away soon. But at least New Yorkers have a refuge where they can get support from public employees who are committed to helping people avoid foreclosure.”