Pols Push for Banking Reforms to Stem Foreclosures

By Eric Yun

With foreclosures still on the rise—-the Associated Press reported last week that 1 in 400 homes are in foreclosure nationwide—New York City Comptroller John Liu and other city politicians are urging banks to reform the loan modification process.

In July, Liu and leaders of city unions sent a letter to Bank of America, Citibank, HSBC Bank, JP Morgan Chase and Wells Fargo urging the financial institutions to take better care of their customers. “When the interests of lenders and borrowers are not properly aligned, there is a lack of incentives to take action, leading to a climate of inferior customer service,” they wrote.

Now, other local elected officials are making sure the banks received the message. Last
week a letter signed by 24 Council Members, 33 Assembly Members and 12 State Senators was sent to the banks demanding change.

Foreclosures are up 16.3% in New York City from last year, and the city’s elected officials believe banks are not doing all they can to bring those numbers down.

“Unfortunately, many New Yorkers can’t get the help they need. A number of them have voiced their frustration and disillusionment with your current modification process,” they wrote. “They have complained about unreturned phone calls, lost paper work and seemingly endless bureaucratic runarounds. Such practices are unfair and unacceptable.”

Liu believes this is an important issue that can help thousands of New Yorkers at risk
for foreclosures. “Reforming the loan modification process means that more families may be able to stay in their homes,” said Liu. “It is in everyone’s best interest to stem the tide of foreclosures. That’s why we have called on the City’s largest banks to report back to my office by September 1 with specific details about what they are doing to combat the high foreclosure rate in New York City.”

The letter sent to the bank included many local elected officials. Some of the local politicians who signed the letter include As- semblywoman Audrey Pheffer (D-Ozone Park), Assemblyman Mike Miller (D-Wood- haven), City Councilwoman Karen Koslowitz (D-Forest Hills) and State Sena- tor Joseph Addabbo (D-Howard Beach).

Addabbo noted that there are many foreclosure victims in his district, and he is doing everything he can to help. “I intend to do whatever I can to assist and protect my constituents from falling prey to this unfortu- nate financial situation,” he said.

“It is vital that the loan modification process to avoid foreclosures is accessible to New Yorkers,” Pheffer said in a statement. “It should be the first priority for all those involved, including the banking industry, to help people keep their homes.”

Koslowitz offered similar comments: “Often times, at no fault of their own, homeowners have been hurt by the policies of financial institutions that only care about their own bottom line. I firmly believe that we in government must do all that we can to support struggling homeowners as we slowly emerge from these hard times.”