Real LI

Some say what happened during the mortgage crisis is a crime. But is it a sin?

A yes comes from the Rev. Tom Goodhue, executive director of Long Island Council of Churches, which has been getting many calls from members asking for help for their parishioners.

“The whole mortgage-backed securities industry is a prime example of people not taking sin seriously,” said Goodhue, who took economics courses in college and has been organizing help seminars for borrowers. “There is within this industry a brokenness that is a manifestation of sin.”

In last month's council newsletter, Goodhue tackled the topic in a column titled “Restoring Trust and Taking Sin Seriously.” He raised the question of why people didn’t expect sin to be committed when lenders and mortgage brokers pushed exotic loans; investors bought packaged loans but didn’t know what was in them; and credit ratings agencies, who rated the loans as solid investments, are paid by the deal makers rather than investors.

Continue reading "Thou shalt not lend easy money" »

New York Gov. Eliot Spitzer said today the Bush administration's effort to help troubled subprime borrowers is too narrow in scope. The administration last week unveiled a plan to freeze interest rates for some homeowners with adjustable rate loans, but it only applies to a narrow slice of borrowers.

So what is New York doing to assist borrowers here? Speaking at an awards luncheon for the New York Housing Conference, the governor pushed a multistate initiative that's in the works. The plan calls for servicers to restructure loans of troubled borrowers on a mass basis.

When will it be unveiled? Spitzer said at a press conference after the luncheon that these negotiations take time. It remains to be seen how effective the multistate initiative will be.

Meanwhile, he said to look for more details about his administration's efforts in the subprime arena in his State of the State address next month.

That's what Newsday's analysis shows today. Read the full package here.

In announcing a plan today to help strapped homeowners whose low introductory mortgage
interest rates are scheduled to rise, President George W. Bush gave out the wrong phone number, broadcast around the nation on television and the Web. It's not 1-800-995-HOPE -- which, at least for now, has a fast busy tone. No, as confirmed by a corrected release soon issued by the White House, the number is 1-888-995-HOPE.

Jim Watson/AFP/Getty Images

The White House today will announce a plan to freeze rates on some subprime loans for five years (or at least that's what's been leaked to the press). But will that help Long Islanders like Freeport homeowner Barbara Santamaria? In Newsday's cover story today, she says she and husband, Alex, pay $3,700 a month on a $414,000 loan. Her 7.5 percent rate from the summer of 2006 will go up to 10 percent in August. "Without a freeze, she said, 'I'm done. There's nothing I can do and there'll be no way I can keep the house.' "

In the midst of the credit crisis, Huntington real estate broker Maria Teresa Quirk did the unthinkable: The Coldwell Banker agent called all of her former clients from the last four years "to make sure they aren't caught in adjustable-rate mortgages resetting to unaffordable payments." Only one person, a Huntington man, was having trouble. Read Newsday's Tami Luhby's full report here.

Newsday Photo / Thomas A. Ferrara

After buying her childhood home from her mother's estate, Kari Sessa and husband, Keith, were in danger of losing the Huntington Station house until the lender agreed to a two-year extension of the 6.1 percent teaser interest rate on their loan, Newsday reports. "Freezing the lower, introductory rates is just the mortgage crisis fix being negotiated by the Bush administration on a bigger scale with banks and lenders, but some Long Islanders said the effort could have a wide-ranging impact far beyond today. It would relieve the short-term burden of current borrowers and keep some from losing their homes yet could also hurt future homeowners by making it harder to get loans." Read more here.

Newsday photo / Ken Sawchuk

In Baldwin, the Fowler family wants to trade up to a bigger home. If you're looking to buy, or sell -- or, like the Fowlers, do both, read Newsday's Tami Luhby's advice for any situation in the final installment of the paper's recent series on the credit crisis.

Newsday photo / Jim Peppler

Writer Claudia Gryvatz Copquin has been renting a three-bedroom place in Northport for herself and her family for eight years. Her lease is up in January and she can't find a new place to go. With foreclosures on the rise, she expects that an apartment on Long Island will be even more difficult to find and that rents will rise. "Some experts speculate that our very shortgage of rental housing is in part to blame for today's subprime crisis," she writes. Read more of her op-ed in today's Newsday here.

California Gov. Arnold Schwarzenegger reached an agreement last week with four major lenders in his state to help homeowners in trouble. Is New York doing the same? New York State Banking Superintendent Richard H. Neiman claims it is. Read Tami Luhby's full report here.

Read all about it here.