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SCOTT JAGOW: Another topic on the Congressional agenda today: the subprime mortgage market. People in neighborhoods across the country have been affected by the subprime meltdown, but not all neighborhoods are created equally. In New York City, a non-profit group has come up with a way for people to visualize the impact of the subprime problems. It’s a map of mortgage defaults. More now from Ilya Marritz.
ILYA MARRITZ: The map looks like someone took a bunch of sprinkles — the kind you get on a cupcake — and dropped them over New York City.
Only instead of landing evenly across the five boroughs, the sprinkles — which represent foreclosures in 2006 — are concentrated in just a few neighborhoods. They’re mostly poor and minority, prime targets for subprime lenders.
CATHY MICKENS: And I’m looking at all of the dots here and I’m sure a lot of these people have come through our doors.
Cathy Mickens advises first time homebuyers in the Queens neighborhood of Jamaica. She says it’s easy to see the effect bad subprime loans are having on the area.
MICKENS: Any one block, we might see now like three, four For Sale signs. And we didn’t see this last year at this time.
East Flatbush in Brooklyn is another area hard hit. A recent study showed that nearly half of all loans in the neighborhood are subprime. Many of those have gone into foreclosure. Karl Dorismond is hoping to avoid that fate.
KARL DORISMOND: From the beginning they tell me my mortgage’s going to be $2,000 — 2,000 or 2,100. Can you believe how much my mortgage is? $2,900.
Last year, Dorismond bought his house for $400,000 with a high-interest, no-money-down mortgage. He says the monthly payments are straining his bus driver’s salary. Now he’s trying to unload the house.
Stories like Dorismond’s make some merchants uneasy. Achuziam Maha sells home furnishings in the heart of Brooklyn’s subprime country, Bedford-Stuyvesant.
ACHUZIAM MAHA:“Oh, I just moved in. I just bought a house. . . .” And we hear that all the time. And then we realize we never saw them again. In terms of the homeowners, if they go into foreclosure, then we will never meet those people.
But Maha sees a silver lining. Bedford-Stuyvesant is rapidly gentrifying. Even as subprime foreclosures force some to leave the neighborhood, more well-heeled residents are taking their place.
And that means there will always be buyers for Maha’s Egyptian cotton sheets.
In New York, I’m Ilya Marritz for Marketplace.
Washington Mutual Bank’s (prime lender) New York City Home Purchase Lending, 2005
Washington Mutual Bank originated 3516home purchase loans in New York City in 2005.
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