TO?SOME?BAJANS in America it’s a step in the right direction, but to others it may be a case of “too little too late”.
What many homeowners in and out of such neighbourhoods as Bedford Stuyvesant, Crown Heights, Canarsie and East Flatbush in Brooklyn, the Wakefield section of the Bronx or southeast Queens, areas hard hit by the housing foreclosure crisis are focusing on is the US$26 billion housing settlement reached by five of the nation’s biggest banks.
The housing calamity has taken a heavy toll on West Indians, not simply in New York, but in Fort Myers and Orlando in Florida, Boston, Hartford, Paterson in New Jersey, Atlanta Georgia and Baltimore in Maryland, to name a few where achieving the American dream of owning a home turned into a nightmare. The situation became so traumatic for some people that they have hid their plight from relatives back home.
The agreement negotiated by Eric Holder, the nation’s attorney general and announced with much justifiable fanfare is but a beginning. For it can and should be a foundation on which to build a much broader housing rescue plan that would aid the 2.5 million homeowners in trouble with their mortgages. Many of the homes involved are “underwater”, meaning the outstanding mortgage loans are much higher than the market value of the houses.
“We see this as a first and important step towards an eventual solution to the nightmare many homeowners are facing,” said United States Congressman Gregory Meeks, a Democrat of Queens, whose Sixth District is at the epicentre of the foreclosure crisis in the state of New York.
Since the settlement was announced about two weeks ago, many homeowners are asking: what will it mean to me?
Here are some of the ways it may help:
• Former owners who have already lost their properties through foreclosure may qualify for a cash payout of between $1 500 to $2 000 as compensation for their suffering.
• Bajans, for instance, whose properties are “underwater”, will be able to renegotiate their loans and take advantage of the historic low interest rates.
• Mortgage servicers are required to offer as much as US$17 billion of the loans across the country.
• Banks must undertake loan modifications of mortgage agreements.
• If an owner is struggling to meet mortgage payments and is heading for foreclosure, some banks are giving them a chance to sell their properties for US$35,000 to avoid losing the homes altogether.
• Only borrowers whose mortgages are with the five banks are eligible to participate.
Obviously, the US$26 billion is simply a drop in the proverbial bucket of what’s really needed to compensate homeowners for their pain and suffering. The process is also complicated for hundreds of thousands seeking assistance. But it points the way to a solution.
There must be an aggressive effort by the banks to help homeowners renegotiate the high-interest rate mortgages, bringing them down to an affordable level. Banks must be compelled to write down the bad loans, many of which shouldn’t have been made in the first place.
Bajans should exercise their right to bring individual law suits against abuse banks if the settlement provisions are unacceptable to them. Just as important, the Justice Department and state Attorneys-General must be vigilant 24/7 to ensure that many of the abusive practices that brought the housing industry to its knees don’t return.
A bit of advice to Bajan homeowners in the U.S.: They should go online or contact The Department of Housing and Urban Development and the offices of State Attorneys-General so they can know more about what’s being offered and take advantage of the benefits.
