Dozens of residents packed the courtroom for the three-hour hearing, which focused on foreclosures, property deed fraud and, especially, on the negative effects of the city’s Third Party Transfer (TPT) program.
While some homeowners shared stories of losing their longtime properties due to what they considered unfair and possibly illegal actions, attorneys and representatives from nonprofits gave suggestions for policy changes that could stem the crisis.
“We hope to have some recommendations for us to take with us in terms of legislative remedies to address these problems,” said State Senator Velmanette Montgomery.
Last October, nearly 20 state legislators penned a joint letter to the New York State Unified Court System and city officials to request a moratorium on the city’s TPT program until an investigation can be conducted on the legality and effects of the initiative.
They noted that a bundle of 66 Brooklyn properties, mostly in “rapidly gentrifying” neighborhoods like Bedford-Stuyvesant, Crown Heights, Brownsville and Bushwick, were taken through foreclosure proceedings.
All of the properties “moved swiftly through court proceedings” in 2017 as a single package, lawmakers wrote. But most of them did not appear to be dilapidated or abandoned buildings, which the TPT program intended to target in the first place.
At the hearing last week, Borough President Eric Adams said black and brown families are not only losing their homes through this program, but also their equity and wealth.
“I think there’s some criminality taking place,” he said. “We need a thorough, forensic audit of every house that was lost.”
Adams echoed a call for a moratorium on the program “until we figure out what is being done.” Lawmakers also called for city officials to provide assistance on maintenance requirements and management support to homeowners and Housing Development Fund Corporation (HDFC) cooperatives, rather than taking the title of their property.
“We’re going to fight for your homes and give it everything we’ve got,” Adams said.
Yolande Nicholson, president of the New York State Foreclosure Defense Bar, said neighborhoods that were once redlined and targeted for predatory lending are now targets of gentrification.
She cast blame not only at city program, but also the courts.
“Our courts have become the fuel of the displacement of our people,” she said.
In addition to the moratorium, Nicholson recommended a tightening of the laws on distressed properties. She also wants the U.S. District Court for the Southern District of New York to invalidate the city’s TPT program.
Other nonprofits stressed to the legislators the importance of adding funding for foreclosure prevention services. Though the State Senate put in a resolution for $20 million in their budget, that amount was reduced to just $12 million in the bill, advocates said.
Catherine Isobe, senior staff attorney at Brooklyn Legal Services, said there are about 6,000 foreclosures pending in Brooklyn, with more on the way. Roughly 25,000 foreclosures have been filed statewide.
“We can’t help everyone with the funding that we have,” she said.