Queen Hit by Subprime Mortgage Crisis

October 6th, 2008

The borough of Queens that is located in New York is facing maximum number of subprime mortgage crisis cases in the city’s real estate market. It has been noticed that the rate of foreclosures in the month of August in Queens increased by nearly 45% from what it was in July this year. On the other hand, the rate of foreclosure in Bronx, Manhattan, Brooklyn, and Staten Island has fallen by almost 29%.

The people who bought their houses with no money down are today facing the brunt of foreclosures. Some of them in a bid to buy home fast took loans and are today unable to make re-payments. They are in a great desperation today. About 20 years back, there was nothing called subprime mortgages solely due to the reason that they are not at all a good idea. However, these homebuyers failed to realize the thing and bought homes without making any down payment.

According to the Neighborhood Economic Development Advocacy Project, the concentration of mortgage defaults in Queens borough are mainly in Cambria Heights, Woodhaven, South Jamaica, part of Corona, and Springfield Gardens. This has led some of the politicians to assume that it is the minority group that has been especially struck by mortgage crisis.

James Sanders (D-Laurelton), City Councilman, said, “This could be the single greatest loss of black wealth since the Great Depression; the greatest loss of Asian wealth since the Japanese internment,” The homeowners who are today facing the problem of foreclosure on their home were misled a few years back that prompted them to take subprime mortgages for buying their properties. Rep. Gregory Meeks last year said, “Many individuals have been misled, and some exploited in their pursuit to obtain a home for their families.”

The problem has taken such a shape today that these homeowners do not know who they could turn up to for some help. The condition of real estate is also at serious stake. Immediate steps have to be taken to help the distressed homeowners come out of the situation. Queens after Staten Island has the lowest number of people who are below the poverty line according to the US Census Bureau. The current wave of foreclosures in Queens has created a great turmoil in the borough.

To help the homeowners in Queens, the court system of New York is providing free financial and legal advice. Apart from this, what is needed is a well planned financial education program.