One response has been the creation of the independent nonprofit Center for New York City Neighborhoods to coordinate the many foreclosure prevention and mitigation programs. On September 25, the director of that organization sat down with City Limits Investigations Editor Jarrett Murphy and other leaders working to address the local crisis to discuss where we are and what can be done. What follows are highlights from that conversation.
The participants:
Oda Friedheim, attorney with Queens Legal Aid who works extensively on foreclosure issues
Michael Hickey, executive director of the Center for NYC Neighborhoods
Stephanie Lawes, housing director at Margert Community Corp. in Far Rockaway, Queens, where she counsels homeowners facing foreclosure and first-time homebuyers
Sarah Ludwig, co-director of NEDAP, the Neighborhood Economic Development Advocacy Project
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Jarrett Murphy: What's been happening on Wall Street seems as if it’s going to be one of those events that folks later on – like an assassination or start of a war or something – would ask, where were you when it happened? So where have you been during this crisis, what part of it do you see, that brings you here today?
Michael Hickey: For me, it started because I worked at Deutsche Bank, and I actually worked in their Corporate Social Responsibility area, and for a number of years had been dealing with issues around predatory lending. It’s gotten itself all caught up with public finance. Within our area, we started developing some programs specifically around intervening in predatory lending, and that was the entry point for my very steep learning curve about these issues. As more and more foreclosures started to occur, the bank would get calls from people, because the bank was listed as the owner of the title and they would find their way to me. So I’d be dealing with homeowners around the country who’d be calling up obviously very upset, trying to understand if there’s any way they could communicate with Deutsche Bank about their mortgage. And we did have a protocol internally, but it was really one of those processes that wasn’t very satisfying. There wasn’t much that the bank would really be able to do.
And at one point my boss said to me, look, you need to kind of understand what all of this is...figure out exactly how this whole thing works. What is this subprime thing, what are the securities? I have a masters degree in social work, this isn’t really my bailiwick, but I went out to try to really dig into these transactions and understand what they were.
And I ended up kind of coming up with a picture of what does it look like, Joe homeowner down to a security holder, and what’s the complex chain that kind of winds that transaction all the way down and splits that mortgage up to a whole bunch of different pieces that makes it really difficult to resolve how that mortgage should be treated, and how is that different from what used to happen when banks held mortgages. We’ve come a long way since then. I did learn a lot, and really started to find myself drawn to the issue, because I think it’s – as much as it’s enormously difficult, and can be quite painful to deal with – it’s also fascinating because of the repercussions that extend from the homeowner in Queens, to the workers on Wall Street. And the deeper you dig, I mean, you just keep unearthing these layers of people of various levels of culpability and responsibility. They knew it the whole time and still played along.
