Study Links Lenders To Swift Foreclosures

In neighborhoods in Brooklyn, Queens and the Bronx hit hard by the subprime lending crisis, mortgages had the shortest of life spans — taking about a year to go from approval to notice of foreclosure — and many of those home loans were originated by the same few lenders, according to a report released yesterday by State Senator Jeffrey D. Klein.

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The report found there were 19,729 foreclosure notices filed in New York City and Westchester and Nassau Counties from July 1, 2006, to July 31, 2007.

In the Jamaica and South Jamaica sections of Queens, the average time from mortgage origination to notice of foreclosure was 11 months. In Wakefield and Baychester in the Bronx, it was 14 months, the report said.

In Queens, the study said, the greatest number of mortgages that resulted in foreclosure notices were issued by three lenders: Fremont Investment and Loan, WMC Mortgage, and the New Century Financial Corporation. Those lenders had also approved the most mortgages set for foreclosure in Brooklyn, the report showed. The three lenders totaled 618 foreclosure notices in the city and Westchester County during the 13 months studied.

Subprime loans have helped borrowers with modest incomes and poor credit buy homes, but the loans usually carry higher fees and interest rates, as well as a higher risk of foreclosure. On Thursday, Senator Charles E. Schumer, Democrat of New York, released a report projecting that of an estimated 364,433 subprime loans held by homeowners in the state, more than 20 percent would end up in foreclosure by the end of 2009.

The time has come for these lending institutions, all these lending institutions on this list, to step up to the plate, Senator Klein, a Democrat who represents parts of the Bronx and Westchester County, said at a news conference yesterday.

He called on lenders to reconfigure subprime mortgages to help people avoid losing their homes.

The study was based on data from county clerks offices, city property records and the research firm PropertyShark.com.

Fremont Investment and Loan is a subsidiary of California-based Fremont General Corporation, one of the countrys biggest subprime lenders until it was ordered by bank regulators in March to stop giving loans to unqualified borrowers. This month, the Massachusetts attorney general sued Fremont General and Fremont Investment and Loan, accusing both of engaging in unfair and deceptive lending practices. Fremont General has said the suit is without merit.

Senator Klein was joined yesterday by four other state senators, as well as two homeowners affected by the subprime crisis. One of the homeowners, Jay Rosado, 40, said he and his wife, Ana, had been locked into two subprime mortgages from Fremont Investment and Loan on their Throgs Neck home. Their payment increased after two years by about $700, to $4,000 a month. After a long ordeal, the couple refinanced both loans at a lower, fixed interest rate.

Its horrible what theyre doing to people, Ana Rosado said of subprime lenders.

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