Helping Families in an Uncertain Economy

Even in the New York City housing bubble, homeowners are feeling the heat of the subprime mortgage crisis with the threat of foreclosure knocking at thousands of doors across the five boroughs.

Leonard and Irene Richards were victims of a predatory loan, but were able to save their home with help from a housing counseling program like the ones supported by the Center for NYC Neighborhoods. Photo by L. Racioppo/NYC HPD.

Legal service providers have been overwhelmed by the volume of homeowners trying to save their homes. The size of the crisis also demands an expedient and comprehensive system of allocating services and coordinating efforts to help low and moderate income New Yorkers in danger of losing their homes.

The Trust made its first grant to combat predatory lending, which many consider to be an extreme version of subprime lending, more than ten years ago. Since then, we've made 15 grants to six organizations for counseling, outreach, legal intervention, and financial assistance in response to a foreclosure crisis that many saw unfolding in the City's neighborhoods long before it became an issue on Wall Street.

Despite the efforts of many organizations, the problem has worsened over time. Recent statistics show that as many as one of every 52 households on Staten Island, one of every 96 in Brooklyn, and one of every 121 in Queens are in the early stages of foreclosure. In the context of this alarming trend, the City's housing commissioner, Shaun Donovan, announced the creation of the Center for NYC Neighborhoods late last year. It will be a clearinghouse of information about foreclosure patterns and trends, as well as a source of operating money and training for nonprofits to help them reach out to and educate homeowners, offer pre- and postmortgage counseling, and provide legal services. With our $75,000 grant, the Center is creating a sophisticated database and a Web site that will direct people to the right places for government assistance, counseling, legal clinics, and other services to help them keep their homes.

The Trust also was one of the first funders of the Financial Clinic, which was started to provide free and low-cost legal services and counseling for low-income people with financial problems. These are people for whom a judge's decision about a creditor's claim or a wage garnishment can be catastrophic. Trying to make ends meet with minimum wage jobs, they must take advantage of every benefit available for working poor families, and they must become disciplined budgeting experts. With our $70,000 grant, the Financial Clinic will now double its capacity by working with the Community Service Society. The Society provides office space in exchange for the Clinic's commitment to train and deploy as financial counselors retired professionals who have been recruited as part of the Society's Retired Seniors Volunteer Program.

Groups like these are often ahead of the curve. As the City's community foundation, we support these organizations as they provide services to and advocacy on behalf of the most vulnerable New Yorkers in good times and bad.