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Distressed Properties Task Force Meets

In an effort to staunch housing foreclosures in the cities that it serves, the Erie County Legislature’s task force on distressed properties is forming their plan of attack.
Western New York Law Center (WNYLC) attorney and coordinator of Buffalo’s Anti-flipping Task Force Kathleen Lynch gave a presentation that painted a bleak picture on the cusp of the City of Buffalo’s Housing Auction to be held from October 20 through 22.
According to Lynch, the path of foreclosure is skewed because “once foreclosure is initiated, it’s not completed, and the house is abandoned. The homeowner flees, the bank holds the lien, but has no responsibility to take title,” Lynch said.
Lynch pulled up a slide that showed foreclosure properties in the region. Blaming sub-prime loans, Lynch said, “In a lot of cases, the forclosing lender is not the originginal lender. Many are out of business, and I’ve seen loans assigned up to seven times, each at a higher interest rate.” Many of the loans on Lynch’s chart started with interest rates around 11%, but most ended up at 18%, making payments impossible for many homeowners.
“Mortgage brokers played a huge role in this,” Lynch said.
Lynch stated that, as a region, we would see foreclosures go down in the next few months, but warned that the numbers won’t be reflective of an up-tick in people’s ability to pay their loans. “As of September 1st, banks have to give 90 days to homeowners who are suffering under sub-prime, high-cost, non-conventional loans,” she explained.
She went on to say that under new legislation, lenders and servicers must come up with at least 5 area housing counselors to help borrowers. “And borrowers must be told they’re entitled to a settlement conference,” Lynch said, noting that all too often, the bank shows up in court in delinquent loan cases, but the homeowner doesn’t.
With 4,700 homes coming up for auction in the City of Buffalo, the entire task force team is faced with getting homeowners to stay put and work out financial plans. Getting the word out is the hardest part it seems, though there are auxiliary services to help homeowners such as the WNYLC, Homefront and a host of city agencies.
A representative from Congressman Brian Higgin’s office, Bonnie Lockwood said, “Cookie cutter formulas don’t work for our area. This isn’t about ‘poor people got mortgages.’ We got hit first, and it’s harder to come out.”

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