Leon Keith nearly lost his three-family home in the Bronx in 2012, after becoming ensnared in a high-profile Ponzi scheme.
He credits the foreclosure prevention services operated by the Legal Aid Society helping him in court and in obtaining a loan modification that enabled him to pay his mortgage.
They [Legal Aid] stuck to a plan and never gave up,” said Keith a 72-year-old retired postal worker. “They said they wouldn’t abandon me if I wanted to keep fighting…and, eventually, we all came to an amiable agreement.”
The network of foreclosure prevention programs that helped Keith faces a financial crisis of its own. Funding for the services will end on Sept. 30.
Advocates for the programs are seeking $30 million in Gov. Andrew Cuomo’s new state budget, which is due by April 1.
Without the budget allocation, crucial services for homeowners and communities will be lost, advocates say.
“We must not allow that to happen,” said Christie Peale, executive director of the Center for New York City Neighborhoods (CNYC), a nonprofit that advocates for affordable housing.
The subprime and financial crisis of 2008 may be in the rear-view mirror, but foreclosure rates in the state and across the country remain high.
Foreclosure prevention services help to keep seniors from foreclosure on reverse mortgages and help stem the tide of so-called “zombie,” or abandoned property foreclosures.
The network, with offices throughout New York City, is there to help New Yorkers, but that without state funding, it will be forced to turn away homeowners in need, Peale said.
There’s no guarantee that the state will come to the rescue.
“The budget process is ongoing and we’re working with our partners in government,” said Morris Peters, a spokesman for the state Division of the Budget.
The CNYC reports that since the 2008 housing crisis, the network of foreclosure prevention services has grown and now numbers 63 home counseling organizations and 31 legal service providers.
Last month, state Sen. Jeffrey Klein and other officials joined with the foreclosure prevention network organizations to release a report detailing the lingering issue of foreclosures in the state.
The report noted that more than 100,000 homeowners and families throughout the state are currently in pre-foreclosure status and are at “severe risk” of foreclosure. These cases are in addition to 72,000 pending foreclosure cases already in the state courts as well as 34,000 new foreclosure filings just last year.
“At a time of sky-high foreclosure filings, record homelessness, and zombie properties running rampant, continued funding for legal foreclosure prevention services and consumer protections is vital,” said Klein, who represents parts of the Bronx and Westchester, in a news release.