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Helping Families in an Uncertain Economy

June 2008

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 in late 2007. 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 post-mortgage counseling, and provide legal services. With our $75,000 grant, the Center contracted with NPowerNY to install and maintain a data collection system that coordinates all of the Center’s intake and outreach activities, including 311 calls, referrals to housing counseling and legal service providers, and clients undergoing loan modification services with banks/mortgage companies.  The Center trained 12 participating organizations how to use the database for data streamlining, individualized record keeping, report and grant management facilitation, and better quality information.

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 With support from The Trust, the Clinic exceeded all of its expected targets.

Staff served 3,502 people with introductory financial coaching and had one-on-one sessions on financial milestones for over 800 people. Customers saved an average of $536 and reduced debt an average of $4,535

The Clinic also created a partnership with SingleStop USA to provide financial coaching at nine new sites, including community colleges, food banks, and community-based nonprofits. 34 nonprofit organizations, totaling in 447 employees, have taken advantage of technical assistance and organization development work.

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.

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