PRESS RELEASE: Empire Justice Center Releases “In the Eye of the Storm: Why the Threat of Foreclosure Damage Continues”

Empire Justice March 19, 2015

Contact: Ruhi Maker,  (585) 454-4060

When It Comes to Foreclosures, the Storm Is Not Over for Many Rochester Area Neighborhoods – Particularly Neighborhoods of Color

Empire Justice Report Calls for State and Federal Policies to Stabilize New York Neighborhoods Impacted by Foreclosures

(Rochester, NY) Today, at a press conference and community briefing at the Telesca Center for Justice, Empire Justice Center released its most recent report, “In the Eye of the Storm: Why the Threat of Foreclosure Damage Continues,” detailing the state of the foreclosure crisis in Rochester, NY, as well as all of New York State, and its impact on neighborhoods and municipalities.

“New York’s lingering foreclosure crisis, prolonged by bank and servicer-caused delays, has turned the American dream of homeownership and economic security into a nightmare.  Families who own homes in city neighborhoods with high concentrations of foreclosures will find it very difficult to build equity for college or retirement, especially if they live in an African-American or Latino neighborhood,” said Michael Hanley, Senior Attorney and lead author of the report.

“I was getting pretty discouraged trying to deal with my servicer and their repeated requests and delays.  Then I found Empire Justice Center.  If it weren’t for the staff’s dogged persistence and advocacy, I probably would have lost my home by now,” reported Victoria Burgos, a city homeowner and client of Empire Justice Center’s Foreclosure Prevention Unit.

Some of the key findings are:

  • The foreclosure crisis is unlikely to be over for some time in Rochester, in Monroe County, and across the State of New York.
  • Delays in the foreclosure process in Monroe County are most often caused by the banks themselves and their attorneys.
  • Foreclosures in Monroe County are most heavily concentrated in communities of color, disproportionately affecting African-American and Latino homeowners and neighborhoods. One-half of African-American and 37% of Latino homeowners live in the top 20% of Monroe County neighborhoods most impacted by foreclosures.
  • Prolonged foreclosures contribute to the city’s problem of vacant housing.
  • Increasing numbers of investor-owned properties in foreclosure are becoming vacant, while simultaneously, more investor-owned houses are going into foreclosure.
  • Abandonment, often made worse by delays created by mortgage holders, is shifting the costs of maintenance and disposition to cities.
  • Recent federal efforts to sell pools of bad loans to investor groups may make the burdens faced by cities worse, unless those purchasers are held accountable for the disposition of the low-value properties in the packages.

The report draws conclusions from local data that are relevant at the state and federal levels, and recommends policies to prevent foreclosures and to mitigate the problems caused by “zombie homes” and other vacant properties in foreclosure.

“Keeping owners in their homes is the best way to prevent a house from becoming vacant, particularly in neighborhoods most impacted by foreclosures or with weak home-buyer markets, which, due to the level of segregation in Rochester, are also often neighborhoods of color,”  stated Ruhi Maker, Senior Attorney and report author.

“Cities like Rochester, through no fault of their own, have been left ‘holding the bag.’  We need action at the state and federal levels to empower and financially support municipalities that have borne the brunt of the foreclosure crisis,” Hanley added.

The report makes specific recommendations to:

  • Maximize continued occupancy of homeowner properties.
  • Provide better information and data to municipalities so they can evaluate, prepare for and monitor problem properties.
  • Give municipalities improved tools and funding to pursue proactive neighborhood stabilization strategies.

One recommendation is the establishment of a statewide fund, like the Community Restoration Fund (CRF) called for by New Yorkers for Responsible Lending (NYRL), to help homeowners avoid foreclosure and to stabilize neighborhoods.  Such a fund would do two things: (1) It would acquire distressed properties to rehabilitate for new owners or demolish if beyond repair; and (2) it would acquire distressed mortgages so homeowners could get affordable modifications and stay in their homes.

“Each day I see how the foreclosure crisis continues to leave its mark on Rochester’s families, housing, streets, commercial strips and neighborhoods.  A fund like the Community Restoration Fund, if it’s adequately capitalized, would help remediate blight in neighborhoods affected by foreclosures and vacancies,” noted Eric Van Dusen, Director of Community Initiatives at NeighborWorks® Rochester.

The full report and related documents can be found at http://empirejustice.org/resources_post/the-lingering-storm-mortgage-lending-disparities-on-long-island/