Subprime lenders – banks and real estate companies that charge higher than normal rates for home loans – have spent much of the past decade using unethical and possibly illegal tactics to stick working families with mortgages they can’t possibly repay.
In one common version of the racket, predatory brokers and lenders aggressively target low-income communities and persuade retirees to mortgage their homes and use the cash to fund repairs or pay off credit cards. Lost in the fine print is the fact the loan’s rate and monthly payments jump substantially after a year or two – leaving consumers saddled with bills they just can’t pay.
For years, the unstable nature of these loans was overlooked by subprime lenders, brokers, appraisers and lawyers who made out like bandits, earning most of their profits from fees and selling off the loans within a few months.
Now the chickens are coming home to roost. More than 13% of all subprime loans are now delinquent, the highest rate in four years. Nationwide, an estimated 2.2 million homes are sliding toward foreclosure: by one estimate, $164 billion in subprime loans made between 1998 and 2006 could go belly-up.
To make matters worse, subprime loans are heavily concentrated among black and Latino borrowers, meaning these communities will bear the brunt of the coming wave of foreclosures. In 2005, for instance, more than 80% of the subprime loans in the New York metro area went to black and Latino borrowers, compared with 9.4% for whites.
The numbers strongly suggest the possibility of illegal loan discrimination. The concentration also means that one of the great national advances of the past decade – the sharp rise in black and Latino homeownership – could crumble in the next few years.
Congress has been holding hearings on the looming economic disaster. Here in New York, an effort to fight back is being mounted by Democrats in the state Senate, including Kevin Parker and Eric Adams of Brooklyn and Malcolm Smith of Queens. Smith and his colleagues are pushing a bill that would bar New York State from doing business with any bank found to be ripping off consumers.
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New Happenings at the Schomburg
If you haven’t been to the Schomburg Center for Research in Black Culture lately, it’s time to take a ride up to Lenox and 135th Street to see one of the crown jewels of the New York Public Library system.
The center recently finished an $11 million dollar renovation that includes new exhibition space, new public computers and a more user-friendly reading room.
Along with the physical changes are new exhibits worth seeing. A show called “Black Art: Treasures From the Schomburg,” uses the library’s new gallery to show off works the Schomburg has rarely displayed, including some original works by Romare Bearden, Elizabeth Catlett and Jacob Lawrence. Elsewhere in the library, some of Malcolm X’s papers go on display May 19.
And upstairs, the library has a hard-hitting exhibit, “Stereotypes vs. Humantypes,” that shows dozens of racist images and artifacts that were plastered on everything from toothpaste tubes and movie posters to children’s books, postcards and paintings in the 19th and 20th centuries.
Right next to the virulent, dehumanizing images and stocked with pictures and paintings from the same period – the 1890s through the 1950s – depicting blacks getting married, gathering in church, marching for civil rights and generally living every dimension of the American Dream.
The juxtaposition makes clear that the depiction of blacks as less than human was always a conscious choice that could – and can – be rejected.
“At first blush, you look at this stuff with a certain sense of disbelief, then a kind of rage,” Howard Dodson, the Schomburg’s director, told me. “Then you realize these are figments of white imagination.”
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The all-important campaign promise by Gov. Spitzer to create jobs in low-income neighborhoods is being put to the test in East New York, Brooklyn, where the MTA – in search of an expanded parking lot for agency vehicles – is on the verge of killing more than a hundred solid union jobs in an area that desperately needs them.
As reported by the Daily News recently, the MTA wants to expand a 30,000-square-foot outdoor depot used for storing Access-a-Ride cars and vans at the corner of Pitkin and Snediker Aves.
The location, in the middle of the bustling East New York Industrial Park, is next to several family-owned manufacturing companies.
The MTA wants to expand the facility by another 50,000 square feet by purchasing adjacent parcels from the local companies – but warned in an internal memo dated Jan. 26 that, “If we are unable to consummate the transactions through negotiations, we may be compelled to acquire the interests by condemnation.”
In plain English, that means the agency would use the state’s power of eminent domain to force the sale of nearby factories, then demolish the structures or turn them into one big bus depot.
One of the businesses that would take a hit is Legion Lighting, which has been making light fixtures in East New York since 1957 and employs a staff of 40. Legion’s a union shop (Local 3 of the International Brotherhood of Electrical Workers) where the average worker makes $14 an hour plus health benefits and a pension.
Another company that would be forced out, Empire State Bus, has been in East New York for a decade, running buses that transport special needs kids. Empire’s drivers and bus monitors are unionized (Teamsters Local 854 and Amalgamated Transit Union Local 1181), and owner John Curcio says they make, on average, $10 to $12 an hour plus health benefits and pension.
Curcio built the company from 10 employees to 110 – and now fears he’ll be put out of business.
There’s no point in trying to create jobs through special programs like industrial parks if the companies that use them can get shoved aside by MTA staffers too lazy to find a solution to a simple problem. If the need is for more space to park cars, the MTA could buy some of those lifts they use in Manhattan parking lots and stack the vehicles.
Better yet, according to Bill Wilkins of the Local Development Corp. of East New York, the MTA could clean up a polluted, unused substation about three blocks away – a 16,000-square-foot property the agency already owns.
* * *Make a Difference
The Administration for Children’s Services (ACS) is hiring Child Protective Specialists, the frontline workers who do one of the city’s toughest jobs: investigating more than 50,000 reports of abuse or neglect the city receives every year. Child protectors provide counseling, referrals to drug treatment programs and other services to families in trouble.
The starting salary is $39,568 and rises to $45,822 after an 18-month training process. Candidates must have a bachelor’s degree with at least 24 credits in some combination of Social Work, Psychology, Sociology, Human Services, Criminal Justice, Cultural Anthropology, Nursing, Early Childhood/and or Elementary Education. Bilingual candidates are especially needed.
Those interested should send a resume and cover letter to ACS Division of Personnel/ Recruitment 150 William Street – 16th floor, JVN# 067-07-0187B-NP New York, New York 10038 Attn: R. Team