Neighborhood Housing Services of Jamaica (NHS Jamaica) has created an Anti-Predatory Lending Task Force in an effort to confront and combat the issue of predatory lending in its New York City service area.

Founded in 1974, NHS Jamaica is a community revitalization organization that increases investment and promotes affordable housing in traditionally underserved neighborhoods in southeast Queens, New York. The agency offers homebuyer education, pre- and postpurchase counseling, and technical and financial assistance. It became a NeighborWorks HomeOwnership Center in fall 2005.
 
The Anti-Predatory Lending Task Force was created in 2003 in response to a substantial increase in subprime and predatory lending situations in southeast Queens. Predatory lenders, offering expensive and unfair loan products, were targeting lower-income, minority, and senior-citizen households who had limited credit options. Customers were tricked into mortgages, home improvement loans, and refinances that seemed affordable, but in reality had excessive rates and fees.
 
In addition, a study conducted by the Neighborhood Economic Development Advocacy Project showed that only 40 percent of all home-purchase loans in the year 2000 in Jamaica were conventional loans (in contrast, conventional loans made up 79 percent of the mortgages borough-wide). The study also showed that 56 percent of the refinances in Jamaica were subprime loans. Furthermore, southeast Queens had the highest foreclosure rate in the borough.

Program and Partners.  The Anti-Predatory Lending Task Force consists of 17 partners including lenders, Realtors, insurance agents, attorneys, and residents as well as victims of predatory loans. Its objective is to educate residents about the dangers of predatory lending and provide assistance to victims of lending abuse. The group provides services primarily to the southeast Queens area, but extends beyond those boundaries when needed.

Meetings.  The task force meets bi-monthly to review individual cases and discuss new and ongoing predatory-lending trends. Committee members coordinate educational events for the public to help them understand the issues facing the community.

Services.  Committee members offer a variety of services and resources. NHS Jamaica provides foreclosure prevention counseling and makes referrals to lender partners who help with loan resolutions and modifications. All partners incorporate predatory lending information into their existing programs (for example, NHS Jamaica has incorporated predatory lending information into its homebuyer’s class) and offer community forums and presentations on the issue. Private attorneys in the task force have helped clients produce successful loan resolution agreements such as forbearances, repayment plans, and loan modifications. In addition, the task force coordinates and funds various marketing tactics.

Staffing.  NHS Jamaica’s full-time community organizer offers one-on-one counseling for victims of predatory lending and works closely with the task force to organize anti-predatory lending activities. This position has evolved over time to include a mix of homeownership preservation activities.

Marketing.  Committee members have created brochures and fliers with information on the predatory lending issue, which are routinely mailed to households in the target area and delivered to banks, civic associations, neighborhood businesses, and other nonprofits. The brochures explain how to avoid problems, outline the resources available, and provide contact information. In addition to direct-mail marketing, partners also announce program activities at public meetings and workshops.

Costs.  Aside from staffing, the only substantial cost is marketing. Additional costs may include refreshments, space rental, and childcare at committee meetings or community events. NHS Jamaica estimates the overall cost at less than $5,000. Staffing costs are worked into the agency’s operating budget.

Funding.  In December 2004, the New York Community Trust awarded NHS Jamaica a $40,000 grant to support the Anti-Predatory Lending Task Force, a portion of which was used to pay the community organizer’s salary. Ongoing funding comes from various entities that make annual contributions to NHS Jamaica. Some partners (such as lenders) provide specific funding for certain events.

The Anti-Predatory Lending Task Force has helped staff learn about the local predatory lending issue and embrace the notion of homeownership preservation.
 
In 2003, NHS Jamaica referred more than 40 predatory lending victims to the Anti-Predatory Lending Task Force for assistance. In addition, more than 2,000 residents were educated about predatory lending through workshops, homebuyer seminars, community fairs, and direct mail.
 
In 2004, the Task Force educated more than 2,100 people about predatory lending through workshops, homebuyer seminars, community fairs, and direct mail. From January through July 2005, the community organizer provided individual counseling to more than 50 predatory lending victims.

• Select partners with care. Select program partners who are willing to commit to the program, agree to its goals, and have a distinct desire, as well as ability, to serve the community. Partners not only need financial resources, but also should have good ideas and good intentions as well. Be sure to reward partners with public recognition.
   
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• Know where the problem exists. Predatory lenders often target lower-income and minority neighborhoods. Reach out to these areas and focus on prevention.
   
• Make sure the agency has sufficient staff. Working with victims of predatory lending is time- and labor-intensive. A great deal of tracking and advocacy is needed, sometimes involving 20 or 30 follow-up counseling sessions.
   
• Be honest with customers from the beginning. It is important to give the best- and worst-case scenarios right from the start, because some families will lose their homes, despite all their hard work.
   
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• Employ a staff person who is empathetic and patient. Predatory lending is an emotional issue, and most victims feel sad and angry. The staff person must also have good communication, organization and advocacy skills since he or she will be in direct contact with lenders and other support services.
   
• Look for creative ways to market the program. Incorporate different strategies for reaching the community and don’t be afraid to try something new. NHS Jamaica plans to conduct door-to-door outreach next spring.

Agency interview on 09-13-05 with Kevin Squires, community organizer