Federal Reserve Desiree Pilgrim-Hunter, executive secretary of the Northwest Bronx Community and Clergy Coalition, testified at a forum on subprime lending. When Nieves Gonzalez’s mortgage payments spiked to nearly $4,000 a month, the stress of possible foreclosure on her two-unit family home in the Bronx took its toll. Her hypertension landed her in the hospital; there, she found out she was diabetic.
Ms. Gonzalez, 63, who emigrated from the Dominican Republic nearly two decades ago, had followed in the footsteps of her neighbors and friends in the past few years: They refinanced their home loans, only to see their interest rates skyrocket and their tenuous hold on homeownership threatened.
“I spent all my savings on the so-called American dream,” Ms. Gonzalez said through a translator on Wednesday. “I almost lost it, and everything else.”
Officials from the Federal Reserve — which has sponsored community meetings from Des Moines, Iowa, to Buffalo, N.Y., in recent months — listened to Ms. Gonzalez, other residents and community advocates at a forum at Trinity Church in Lower Manhattan. The theme was the devastation wrought by subprime loans and predatory lending.
“We’re not disconnected,” said Anna Alvarez Boyd, associate director of the Federal Reserve’s division of consumer and community affairs. “I don’t think anyone can walk away from what we’ve been through and not think differently.”
Ms. Boyd and her colleagues listened to pleas from residents seeking a reform of the federal Community Reinvestment Act, which some critics say does not have adequate protections for homeowners from shady mortgage companies and bank subsidiaries. At the forum, some advocates also called on the Federal Reserve to embrace President Obama’s proposal for a new consumer protection agency that would regulate home loans, credit card fees and other consumer-finance products.
Ms. Boyd said the act had been “effective over all” and noted that major changes would have to be enacted by Congress.
The high concentration of renters in New York poses a distinct challenge for the city, compared to other major urban areas, Ms. Boyd added. Landlords often foreclose on properties where dozens of families live.
Blacks and Latinos in New York, as elsewhere, face particularly high risk of foreclosure. During Wednesday’s forum, James Lewis, program director at the Harlem-based nonprofit group Changer (Communities Homeowners and Neighbors Gaining Economic Rights), stood at a lectern, pointing to a map showing the correlation between poverty and foreclosure in sections of Brooklyn, Queens and the Bronx.
Consumer advocates say banks, which once drew red lines on maps around poor minority neighborhoods to decide which residents should be refused loans, descended on these neighborhoods with subprime loans.
“When they decided to lend us money, they lent us a toxic product,” said Mr. Lewis, standing above a sign that read “Change the Rules on Wall Street.”
Pauline Mangwa-Yonke, a 70-year-old woman living in Corona, Queens, with her daughter, knows the problem well. She has had trouble getting rent from her tenants in a house she bought in St. Albans, Queens, three years ago. The high interest rates on her mortgage have made it a struggle to make payments, she said.
She receives calls from the bank daily. “I’m like the homeless, because I’m running from my house,” Ms. Mangwa-Yonke said.
With the Dow Jones industrial average closing above 10,000 on Wednesday and JPMorgan Chase reporting a $3.6 billion profit for the third quarter, Heidi Hynes, a board member of the Northwest Bronx Community and Clergy Coalition, said homeowners should also be receiving help.
“It feels like the banks are trying to saw our legs off,” Ms. Hynes said.
In Ms. Gonzalez’s case, she remained persistent, despite her limited English. She maxed out her credit cards and twice tried to sell the home for less than she owed. Finally, Mr. Lewis’s organization helped her modify her loan, and Ms. Gonzalez, a graphic designer for the Spanish-language daily newspaper El Diario La Prensa, was able to keep her home.
“I looked everywhere for help,” Ms. Gonzalez said. “I found it, but I hope no one goes through my experience again.”
http://cityroom.blogs.nytimes.com/2009/10/15/official-from-the-fed-hear-new-yorkers-subprime-woes/
How well is the government's loan modification working? WalletPop's four-part special report continues with profiles of some of those trying to get help. To read the overview, 
