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subprime loans affecting crown heights — Brooklynian

subprime loans affecting crown heights

anonymous
anonymous
edited November -1 in Crown Heights/Prospect Lefferts Gardens
About $1 trillion in adjustable-rate mortgages will reset at a higher rate, including billions’ worth in New York. Subprime-related foreclosures are not a significant cause for worry—there are relatively few in New York—but those who can’t afford the new rates will sell at a loss. Meanwhile, the qualified-buyer pool is shrinking because jumbo loans are harder to get, even with good credit. Wall Street gets hit on three sides: Banks and brokerages cope with large losses, stock prices are starting to reflect a recession. Smaller Christmas bonuses this year guarantee that the demand for four-plus-bedroom apartments won’t pull up the rest of the market. In addition, some of the younger banker types who bought in 2005 are now laid off and pondering selling. Inventory swells, and the price slide begins in earnest. “Pockets of distress” (former fast-flip frontiers such as Bed-Stuy and Crown Heights) lead the way down.
How high will you pay for rent just to keep your landlord from selling at a low price, in turn bringing the neighborhood back to basics :?:

Comments

  • lucille
    lucille
    What?
  • form
    form
    Mortgage spam
  • lilbangladesh
    lilbangladesh
    Actually, it seems to be a legitimate issue.

    Only problem is, I have nothing constructive to add.
  • boogieknight
    boogieknight
    I don't think the subprime has/had much impact here in NYC because the outrageously high purchase prices are sort of justified/stable...

    Which means that it's practically impossible for a no/bad credit - low-earning person/family to buy into a market where the median price home is probably at about $500K. No matter what sort of no money down-ARM nonsense you try, it's just too much money out of pocket to swing for these people.

    Its easier to scam some poor folk who own their homes outright into taking out stupid re-finances, which they find out later that they cannot afford, but that's a small portion of the entire subprime market.

    In markets where the median price is closer to $100-200K, then you could ensnare a lot more people with fiscally unsound financing packages.

    I think.
  • lilbangladesh
    lilbangladesh
    I dunno. Foreclosures are up all around the city and when I looked at an apartment in Bushwick, I saw a lot of foreclosed homes.
  • anonymous
    anonymous
    BoogieKnight wrote: I don't think the subprime has/had much impact here in NYC because the outrageously high purchase prices are sort of justified/stable...

    Which means that it's practically impossible for a no/bad credit - low-earning person/family to buy into a market where the median price home is probably at about $500K. No matter what sort of no money down-ARM nonsense you try, it's just too much money out of pocket to swing for these people.

    Its easier to scam some poor folk who own their homes outright into taking out stupid re-finances, which they find out later that they cannot afford, but that's a small portion of the entire subprime market.

    In markets where the median price is closer to $100-200K, then you could ensnare a lot more people with fiscally unsound financing packages.

    I think.
    the whole problem with this is that a conforming loan is the only loan being approved nowadays; the qualifications are for the home to be a 2 unit and $417,000 and below; anything above is considered a jumbo loan. Getting Jumbo loans approved are not as hard as a subprime deal but the market for it are slim and very hard to qualify. I agree that Wall Street is getting hit hard and we will be looking at a recession. I do not really see worry for renters. These 4-6 units willbe sold under value within the next 2 years in turn will lower rent. there shouldn"t be anything wrong with that
  • dewalt_russ
    dewalt_russ
    Predatory lending and subprime mortages are actually a huge problem in lower-income sections of the city. Here's a map from NEDAP, a group that tracks this sort of thing. It's from 2004, unfortunately.

    Brooklyn's not the worst borough in the city for this, but it's close. According to a study released by state Sen. Jeff Klein, Queens led the five boroughs in foreclosures between July 2006 and July 2007 with 5,707. Kings County was a close second with 4,952.
  • crownheightsproud
    crownheightsproud
    Unfortunately, the people boogienight mentions - the mostly older people who take out home financing loans that they find out they can't repay, make up most of the foreclosures in our community. This is predatory lending at its worst. These people did everything right years ago - bought homes in places like Crown Heights when no bank would lend to them, and the neighborhoods were turning into war zones. Now, over 30 years later, the mortgage is paid off, the houses are theirs free and clear, and because they need a new roof, or need surgury, they fall victim to some fast talking loan officer who promises them the moon.

    When predatory lending can be proved, it can be prosecuted. Unfortunately most people only stand by and lose their homes and lives. Education is the best key to preventing this. If you or anyone you know is unsure or suspicious of a too good deal, get help. Non profit services like Neighborhood Housing Services have people who can educate you and even sit there and go through the paperwork with you. Don't let anyone pressure you into signing anything, and the old adage is true. If it sounds too good to be true, it is.

    Knowlege is the best weapon against predatory lending. For senior citizens, there are alternatives, such as reverse mortgages, to a straight refinance. Council any homeowner to check out all mortgage brokers with the BBB, including major banks. Some of them are horrible to deal with, and have as much compassion as Simon Legree.

    Your home is your largest asset. Protect it by thinking first, and signing on the dotted line last. Our seniors survived the redlining, then the crack wars and the resulting crime waves, and are still here to see our neighborhoods coming back. What a shame to get mugged by a fast talker in a suit.

    Sorry for the lecture. This is a subject I care about deeply.
  • stacey
    stacey
    CHP is correct. Many seniors fall prey to this type of lending. Another place that can help someone who this happens to is South Brooklyn Legal Services. If you do know a senior who is looking to cash out some equity but lives on a fixed budget, I have heard really good things about these reverse mortgages for seniors.
  • lucille
    lucille
    So did this thread start as mortgage spam? Bad place for it, I guess, as all of the responses indicate a keen awareness of mortgage-related issues. Where'd the post author get to, anyway?
  • anonymous
    anonymous
    Lucille wrote: So did this thread start as mortgage spam? Bad place for it, I guess, as all of the responses indicate a keen awareness of mortgage-related issues. Where'd the post author get to, anyway?
    The only thing i am promoting is knowledge...
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