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.

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.

Embattled mortgage lender Countrywide Financial announced today that it will change the terms on $16 billion of adjustable-rate mortgages to help people stay in their homes.

Countrywide, the nation's largest lender which is also active on Long Island, will start calling borrowers at risk of default to refinance or modify their loan terms through the end of 2008. It plans to contact 52,000 subprime borrowers who have been paying their bills and another 10,000 borrowers who are delinquent because of a rate reset. The company will also reach out to an additional 20,000 homeowners with prime and subprime loans who are current but will likely have difficulty affording an upcoming reset.

Many people who took out ARMs with super-low teaser interest rates that are now resetting to much higher rates. They are finding they can't afford the new rates, which is driving up delinquencies and foreclosures nationwide.

But not everyone is convinced the company is being altruistic.

“Given Countrywide’s track record, a lot of questions must be answered before they get a pat on the back," said Sen. Charles Schumer (D-NY) "What are the fees they will be charging borrowers to refinance or restructure their loans? Who will qualify for help? And are they putting these borrowers into safe, affordable products or another unsuitable loan?”

Nassau and Suffolk lead the state in percentage growth of delinquent subprime mortages, according to a recent report from NeighborWorks America, a national nonprofit focused on community revitalization.

Delinquent loans increased 5.09 percent between December 2005 and December 2006, according to the report, citing statistics from First American LoanPerformance. Some 11.7 percent of subprime borrowers on Long Island were at least 60 days late in their payments.

Homeowners who are having trouble paying their mortgage can call NeighborWorks America's toll-free foreclosure prevention hotline 888-995-HOPE for round-the-clock counseling. You can also be connected to counselors on Long Island.

New York and other states have called on lenders and loan servicing companies to provide data and other proof that they're reaching out to at-risk borrowers and adjusting their loans.

"We want to be sure there's no disconnect between what we're hearing from servicers and what we're seeing in practice," said Richard Neiman, New York's state banking superintendent.

Foreclsoure prevention counselors are pretty busy these days.

Long Islanders falling behind on their mortgages are flocking to housing counselors to help them save their homes. Two of the leading nonprofits assisting homeowners -- the Community Development Corp. of Long Island and the Long Island Housing Partnership -- say they are seeing a 10-fold increase in the number of people calling.

"Our counselors are overwhelmed," said Marianne Garvin, president of the Community Development Corp. of Long Island.

Most Americans don't know the terms of their adjustable rate mortgages, according to a new survey.

Nearly three-quarters of homeowners with ARMs don't know how much their monthly mortgage payments will adjust when the rate resets, according to the survey from the AFL-CIO labor union. Nearly half say they do not know how their ARMs adjust.

More than four in 10 homeowners whose ARMs had reset said they are worried about making their monthly mortgage payments. Among borrowers with incomes of less than $50,000, the figure is 59 percent.

With people used to refinancing their homes every few years, it's not surprising they don't know the terms of their mortgages, said Jonathan Pinard, president of the Empire State Mortgage Bankers Association in Hauppauge.

Check out Tami Luhby's package today about how Long Islanders like Manhasset single mother Kathryn Clejan will be suffering once their adjustable rate mortgages reset.

Newsday Photo / Ken Sawchuk