N.Y. Coalition Tells Big Banks Do More to Stop Foreclosures

by Mike Hall, Jul 14, 2010

A coalition of New York City unions and community groups, joined by city Comptroller John Liu, told some of the biggest banks that received hundreds of billions in taxpayer bailouts that it’s time to help out  New York homeowners facing foreclosure.

In letters to JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, PNC, Wachovia and U.S. Bank, the group says the banks are not doing enough to modify mortgages to help homeowners stay in their homes.

Nationwide, just 168,700 permanent modifications have been made under a voluntary federal program, with fewer than 12,000 in New York. But there are 265,000 homeowners deeply behind in payments or already in the foreclosure process. In 2009, foreclosures were up by 30 percent in the state over 2007 and in New York City just in the first quarter of this year, up 16 percent over the same time last year.

Michael Mulgrew, president of the United Federation of Teachers (UFT), an AFT affiliate, says:

We are trying to help [homeowners] who are doing the right thing. It seems the banks are not really doing a lot on this. They are not trying to negotiate in many instances.

The letter says that customers seeking loan medications often get the run around from banks through delays, changed deadlines, failure to return calls, multiple requests for the same paperwork.

Every day that borrowers and counseling agencies are sidelined is another day that a family can lose their home, further destabilizing the financial sector and overall economy.

The group asks each bank to appoint a high-level executive to handle appeals of those denied modifications, make improvements in customer service to avoid the delays, suspend foreclosures while modification applications are in process and make other changes.

Both New York City and the unions have large pension funds, portions of which are invested in the Big Banks. But Liu told the New York Times, “It’s premature to talk about sticks,” such as moving pension funds, if the banks don’t respond to the coalition’s request to do more to stem the tide of foreclosures.

Along with UFT, the coalition includes Transport Workers (TWU) Local 100, AFSCME District Council 37, SEIU 1199 and 32BJ, the New York Hotel and Motel Trades Council and New York Communities for Change.

In related news, next Thursday, July 22, in Atlanta, the AFL-CIO, the North Georgia Labor Council and the Atlantans Fighting Foreclosure Coalition will hold a community hearing and rally on the foreclosure crisis.

Both the hearing and rally will focus on the Big Banks’ roles in creating the financial collapse that lead to the housing and foreclosure disaster and how it all ties into the job crisis. We will keep you posted.

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