By Marcia Moxam Comrie

Your home is supposed to be your castle, but there are lenders at work in Southeast Queens who want to collect your pride and your hard earned cash until someone else takes away your home.

According to Storm Russell, director of Neighborhood Housing Improvement of Jamaica (NHI), predatory lending involves mortgages but is not confined to mortgages.

The practice extends into
every facet of the buying and ownership process and there
is no way to prevent becoming a victim if one doesn’t know what to look for, he said.

"It can be the broker, the attorney or the appraiser,"
said Russell. "You need to know (up front) what role each one plays. We as humans see these people as professionals so we put our lives in their hands without questions and then we fall asleep."

Russell also explained that there have been homeowners who have received a mortgage and don’t even know where it came from.

"Your attorney should be available to answer you [and for you]" said Russell. "You hire them to look out for your interests."

According to the NHI director, new homebuyers need to educate themselves about the buying process before they even start looking at properties.

Russell stressed that one of the greatest concerns of the home buying process is the one-stop-shop concept whereby the broker encourages the buyer to utilize the services of professionals he or she is connected with through the business.

The attorney, appraiser, mortgage-company and the engineer should not be coming from the broker’s recommendation. It’s the "don’t worry we’ll take care of everything," syndrome that they often use to hook buyers and that is what leads to trouble once they take ownership.

"That is not in your best interest," Russell explained. "It results in fraudulent underwriting, inflated and unsafe appraisals and inflated interest rates. You need to hire your own professionals."

According to NHI reports, buyers have been known to purchase properties with serious structural problems overlooked by the appraisers.

Issues such as poor plumbing and unsafe, inferior electrical wiring can seriously affect the structural integrity of the building. The report also cites incidences of superficial repairs by sellers who want to make a quick sale with a minimum amount of repairs. They may conceal serious damags in the floor by covering it with a piece of carpet.

When new homeowners have to do extensive repairs it can lead to difficulty making the mortgage payments and in worst case scenarios, foreclosure on the property. Some new homeowners are also encouraged by unscrupulous lenders and contractors to get loans they know they cannot possibly repay and they subsequently lose their property.

According to Ed Williams, a housing expert and representative to Congressman Gregory Meeks, incidents of predatory lending are becoming more frequent and the practice is becoming so prevalent in southeast Queens that Meeks hosted a forum earlier this year to address the issue.

"We had eight constituents victimized by the same group," said Williams. "There is a program called 203K whereby Housing and Urban Development (HUD) guarantees the loan to the lender who then markets it to the borrower. One particular agency advertised that they could help stop foreclosure. They coerced the constituents into signing over their properties to them, promising to turn them back over after six months, but did not do that. It is a clear practice of criminality, which is why the case is in litigation," said Williams.

A spokesman at HUD’s New York office told the PRESS that defaults and foreclosures were so rampant with HUD loans throughout the nation that they’ve became suspicious, leading to the first moratorium which recently took place in Baltimore.

According to Williams the practice is widespread throughout the 6th Congressional District and Meeks turned to Senator Charles Schumer for his help in the matter.

"Because of the astronomical incidence (of predatory lending) in the 6th Congressional District, Schumer got HUD to empower a predatory lending task force, which was able to gather enough information to prove that the practice was widespread," said Williams.

"So Schumer got HUD to impose a moratorium on foreclosures on HUD mortgages," he said.

At presstime there was a press conference scheduled for HUD Secretary Andrew Cuomo and Schumer to formally announce the New York moratorium this week.

Attorney General Eliot Spitzer recently announced a $6 million settlement with Long Island-based mortgage company Delta Funding– reportedly the same company to which Meeks’ office alluded – which made 1,000 high-interest home loans to low income minority residents in Queens over the past three years.

It is a settlement, which according to Spitzer, "should fundamentally change the way an important segment of the home loan industry operates throughout New York State."

According to the attorney general, the landmark decision has "struck an important balance" between cleaning up the lending industry "which has been preying on poor people" while continuing to encourage lenders to do business in "underserved" communities.

The settlement will serve two functions. First it will help "right past wrongs," and secondly, protect borrowers in the future, the attorney general said.

The consensus is that homeowners and prospective homeowners should educate themselves on the borrowing and improvement process before embarking on these expensive propositions.

According to Leroy Comrie, a representative of Councilman Archie Spigner, people tend to do more research into buying stereo equipment than they do into buying a house.

"There are agencies available to help them make the right decisions," said Comrie. "Agencies such as Neighborhood Housing Services of Jamaica (NHS), which teaches homeowners to do much of their own home repairs, Jamaica Neighborhood Stabilization Program helps low income homeowners and Neighborhood Housing Improvement is also a great resource."

In addition to training in home repair and improvements, NHS also conducts homebuyers’ workshops, which teaches all about the buying process and how to avoid becoming a victim. Indeed, the program even has a "club" called, appropriately enough, "First Home Club." The First Home Club is a savings account whereby every dollar you save can be matched with three dollars up to $5000.

There is also an emergency loan program of up to $6,500 for emergency home repairs such as a broken boiler. These loans, reportedly, are processed within 72 hours and terms and rates are three to six percent.

NHS next (free) homebuyers’ seminars meet at the Queens Library at 89-11 Merrick Blvd. across from the bus terminal, 5:30 to 8:30 p.m. Nov. 9 through 16.

In an effort to curb the scourge of predatory mortgage lending, Comptroller Alan Hevesi, GreenPoint Bank and NHS will also sponsor a series of educational seminars in communities throughout the city. Faith Center for Community Development and Council of Senior Centers and Services (CSCS) will co-sponsor the events.

The seminars, titled "Protect Yourself...Protect Your Home," are free. They will last 90 minutes and will focus on how to avoid becoming a victim of predatory lending. They will also provide strategies for homeowners having difficulty making their mortgage payments. For more information, call 962-0193.