Jamaica Center — One recent Saturday, 59-year-old Myrna Barnes walked into a Queens gymnasium full of homeowners in danger of foreclosure, looking for some advice about saving the home she had lived in since she was nine-years-old. The gym, on the York College campus, had been transformed into the grounds of a Home Rescue Fair. Ringing the sidelines and the baselines sat rows and rows of bank representatives working at laptops on folding tables, reps from Freddie Mae and Fannie Mac, and a small fleet of housing counselors and legal service providers. All around, distressed homeowners sat, watched, and waited their turn to meet with someone who could help them figure out what to do.

Barnes sat on a folding chair, waiting to meet with an advocate in the legal services area. "We're here to save our homes," she said. That day, Barnes was one of approximately 830 homeowners to attend the fair organized by the Center for New York City Neighborhoods (CNYCN), the city's de facto foreclosure response team. Like her, the overwhelming majority were people of color.

While the national foreclosure crisis that started in 2007 has receded in New York, it continues to rage throughout many predominantly black and Latino city neighborhoods. Despite a slight dip in the number of properties entering foreclosure citywide at the end of last year, "we still see, by historical standards, very elevated levels of foreclosure activity in predominantly nonwhite neighborhoods in 2010," says Josiah Madar, a research fellow at NYU's Furman Center for Real Estate and Urban Policy.

Foreclosure activity remains highly concentrated in southeast Queens, north-central Brooklyn, and the north shore of Staten Island. According to the Furman Center's State of the City 2010, last year more than 50 percent of properties that were acquired by the foreclosing lender were found in fewer than nine percent of the city's community districts.

A report co-authored by the Manhattan-based Neighborhood Economic Development Advocacy Project (NEDAP) this spring found that, between 2008 and 2009, conventional refinance lending decreased by 14 percent in New York City's neighborhoods of color, while lending in the city's predominantly white neighborhoods increased by more than 110 percent. Difficulty refinancing means distressed homeowners of color may be having a harder time holding on to their homes than distressed white homeowners.

Job market and foreclosure linked

The racial disparities were evident at the fair, and are apparent in the client bases of organizations helping homeowners avoid foreclosures. 75 percent of the clients of CNYCN are people of color, says Michael Hickey, the organization's director.

More and more of those who come to CNYCN for help have "good," fixed-rate mortgages, as opposed to those that derived from subprime loans. But many of them can't make the payments on what are otherwise attractive loans because they lost all or part of their income during the recession, which disproportionately affected people of color. "You look at the neighborhoods where the foreclosure crisis is occurring, and these are communities where there's a large concentration of people connected to the service economy, or to the public sector, both of which have really suffered in the downturn," Hickey says.

Many also find they don't qualify for federal programs designed to help distressed homeowners. "It's very difficult to predict who will be successful in getting a modification because the system is so...full of misinformation and lost documentation and inconsistent responses that two people who look exactly the same may get completely different results from the same bank," says Hickey.

In this slack job market, analysts at NEDAP worry that foreclosure will affect distressed homeowners' credit score—which could be viewed negatively by potential employers.

"One [consequence] that we're really concerned about right now is that employers have taken to using credit reports as an employment screening tool," says Alexis Iwanisziw. "They might deny a person a job as a result of that."

Health woes, then mortgage worries

Myrna Barnes inherited the home she lives in now from her family at the age of 25. Her mortgage troubles began when her husband, who is self-employed, got sick and needed surgery. She had left a stressful nursing job, thinking she would be able to find another position in the same field, and neither she nor her husband had medical insurance at the time.

When two hospitals in Queens closed, it was even harder for her to find employment as a nurse—"Boom. Nada. Nothing," she says.

She has since become employed again, and although the salary and benefits aren't as good as what she had before, she's thankful. But she's also nearing retirement, and she used her retirement funds to pay bills when she was out of work. This is the worst-off she has ever been financially. "I don't want to continue using my retirement funds to pay for my mortgage," she says. She was "close to danger," she adds. "I'm behind on my mortgage. I'm on the borderline and I don't want to cross it."

To get help, Barnes applied for a modification under the Home Affordable Modification Program (HAMP), and was denied. She applied for an internal review, and was still denied. She came to the Home Rescue Fair hoping to meet with her lender. But when she arrived and looked for her bank she realized that none of its representatives were present.

Finally, Barnes's turn came up. She went to sit with a representative from the Alliance for Stabilizing Our Communities. When she got up from the table, she had a business card for someone at the Mutual Housing Association of NY; she was told to contact them in case she gets any letters from her lender.

"In other words, I'll get some assistance," she said. She said was trying to do, "basically, whatever it takes to hold on to what is mine and what I've worked hard for all my life."

Modifications hard to come by

CNYCN is a unique organization in the foreclosure landscape. It grew out of a number of advocacy organizations that were on the frontlines in the neighborhoods where subprime lending was targeted. As these groups spotted more and more mortgage offers that didn't add up, "they saw trends that they found really disturbing," says Hickey.