One in 40 New York City homes with a mortgage is in foreclosure, and there are 26,000 subprime loans in the city. “A lot of these people were okay paying 5 or 7 percent mortgages, but when their monthly payments exploded, they ran into trouble,” says State Senator Jeff Klein, who is running sessions for borrowers to meet with mortgage servicers and bank counselors. “We need to force lending institutions to sit down with loan holders and modify the terms,” he says. Invitations were sent to 20,000 New Yorkers in or near foreclosure. Arianne Cohen spoke to four of them at Klein’s first forum, in the Bronx, on February 23.
69, charter-bus driver, East Bronx
Why are you here today? I’ve been in foreclosure less than a month.
What happened? My mortgage payment went from $2,482 to $3,500 a month. I had a two-year teaser rate. Every six months it goes up 1 percent, to a maximum of 13.2 percent.
Who’d you talk to? I spoke to Wells Fargo. I tried to get them to keep the rate at the teaser rate, 6.8 percent. They might, but my credit’s bad. I’m in a home that cost us $35,000 in the sixties. We refinanced three times, and we owe $400,000.
Dr. Bola Omotosho
47, clinical researcher, South Bronx
Tell me about yourself. I’m a Nigerian-trained physician, and I want to save my house. My mortgage ballooned from $2,700 to $4,500, and every six months it goes up $500. It’s a three-family house, and I refinanced two years ago.
Did you know about the adjustments? I was told that it increased every six months, but I didn’t realize the impact it would have. And my situation changed.
How? My triplets are college-bound. They’re eleventh-graders.
47, publicist, College Point
Are you in foreclosure? No. I’d like to refinance. My rate’s too high— it’s a fixed-rate at 7 percent.
What did they tell you? They tell me that my rate is good.
What happened? I just refinanced last year, and now owe $350,000. If I refinance to get a lower rate, I have to pay $14,000 in closing costs. New York State closing rates are very high.
Why’d you refinance? To pay off bills and remodel the house. I’m sorry I refinanced. I’d own the house 100 percent today.
34, audio engineer, Pelham
What happened? We had a mortgage guy, Ernest, who arranged a second loan last year. It’s at 7.5 percent, and it balloons. Now we’re paying $5,000 per month, and with all the late payments, owe $690,000.
Are you making the payments? I even got us two roommates, but we missed our first payment in June.
How’d you get the second loan? We listened to Ernest, and didn’t read. Ernest said, “Don’t worry, everything’s okay.” Everything’s not okay. That’s our fault, we should have read.