Federal Reserve officials met last night with New York City residents to learn how the subprime mortgage crisis has affected city homeowners. Of particular concern during the meeting was the Community Reinvestment Act, which residents say does not adequately protect borrowers from predatory lenders. Residents told the visiting Fed members that an overhaul of the program is necessary to protect borrowers, particularly in low-income regions, where the rate of home foreclosures is particularly high. Like other homeowner advocates, James Lewis, program director at Changer, a non-profit group aimed at helping homeowners, said that predatory lenders often target low-income regions, especially in New York City.

As more New York City neighborhoods are being affected by the current
wave of foreclosures, non-profit organizations such as Changer are
stepping in and offering a helping hand to the areas hardest hit, like
East New York. The organization’s mission is to help homeowners by
offering free legal services and making them aware of potential scams.
Neighborhoods that have been hurt most by the foreclosure crisis, such
as Canarsie, Brooklyn, have been targeted by so called “loan
modification consultants” who charge up to $5,000 and falsely claim
they will help homeowners escape foreclosure. In response to these
scams, non-profits like Changer hold free seminars and forums in which
residents can learn how to smartly handle a potential foreclosure
situation and get back on track with payments. [more]