A Department of Housing and Urban Development mortgage program that’s supposed to help struggling homeowners is actually leaving many of them vulnerable to foreclosure — particularly African Americans, advocates and politicians said Thursday.
Many of the homeowners in danger live in southeast Queens, a bastion of black home ownership for generations.
“This is injustice pure and simple,” said State Sen. Leroy Comrie, who reps St. Albans.
The problems have been brewing since HUD began selling off defaulted Federal Housing Administration mortgages, which had been given to homeowners with guarantees that if they ran into trouble they could take steps to save their home.
HUD sold the mortgages for bargain prices to private equity funds, who aren’t required to give the homeowners the HUD protections like generous modification deals if they fall behind on payments.
Those protections weren’t free.
The homeowners paid thousands extra for them in closing costs, and also in insurance payments.
Queens homeowner Joseph Washington was in the process of modifying his mortgage with HUD when it was sold to a private equity firm.
Under his new terms, the firm plans to charge him $650 more a month in five years — which he can’t afford.
“I lose sleep at night,” he said.
Filed under: foreclosure