While the nation’s foreclosure crisis peaked a number of years ago, there are still many homeowners in New York who are facing foreclosure, and may be wondering if there is any way out of their situation. In fact, for some homeowners, relief may be on its way.
New York City is addressing the city’s foreclosure crisis in a unique way — by purchasing long-unpaid mortgages. The program, known as the “Community Restoration Program,” then aims to either help homeowners keep their homes, or if that is not a possibility, then to convert the homes into affordable housing. The mortgages will be bought from the federal Housing and Urban Development department. New York City is one of the first cities to undertake an initiative like this.
Currently, the $13 million program has purchased 24 properties consisting of 41 houses and apartments. The funds come from various sources, including the City Council, a loan from Goldman Sachs and from settlements between a number of financial institutions and the state attorney general. The borrowers in the program have federally-insured mortgage delinquencies that in some cases date back to 2002. The city has yet to provide the identities of both the properties purchased through the program or the property owners, as they are not yet legally allowed to let the property owners know that they are part of the program.
Through the program, nonprofit groups will attempt to work with the homeowners to determine whether a change in the terms of the loan would make it possible for them to pay them. If this is not a possibility, homeowners may be able to give up ownership but remain in their home as a renter. Alternatively, the homeowner can be moved to affordable housing somewhere else. If the homeowner is an absentee owner, the city will foreclose on the home, and then either put it up for sale, or convert it to an affordable rental property.
Hopefully this new initiative will help New Yorkers facing foreclosure either keep their homes, or provide them with another alternative that works for them. In the end, it may be possible, either through programs like this or by filing for bankruptcy to halt the foreclosure process, and in some cases save one’s home.
Source: U.S. News, “APNewsBreak: To fight foreclosure, NYC buying mortgages,” Jennifer Peltz, June 30, 2016
