Plainfielders could be forgiven if they thought New York and New Jersey were not only on two separate planets when it comes to handling the subprime mortgage crisis, but two separate planets in two separate universes.
In New York, Attorney General Andrew Cuomo, son of the justly famous former governor Mario Cuomo, is intent on pinning down the who-did-what-with-whom-and-when of it all (read about it here).
He is currently going after WaMu (formerly known as Washington Mutual), a big subprime mortgage player, for conspiring with appraisers to gin up appraisals on properties so that WaMu could collect large fees. ($200 here and $200 there added up to many millions for its bottom line.)
But Cuomo doesn't stop there; he is looking to tie Fannie Mae and Freddie Mac (which, together, own or insure 40% of American residential mortgages) into the tidy little scheme.
All well and good, but nary a whisper about the poor homeowner caught in the bind.
Meanwhile, in the parallel universe of New Jersey, the approach is quite different (read more here).
In New Jersey, the state cares about YOU.
In New Jersey, state government, banks and mortage companies have worked out a fund of $433M to refinance subprime mortgages. An estimated 19,000 of the state's 40,000 mortgages which are behind in payments are subprime.
But get this: To get a rate re-adjustment before the first reset kicks in, borrowers must not have ANY late payments in the past twelve months and their credit score must be at least 575.
Kind of reminds me of the old joke about bankers -- that they only lend money to people who don't need it.
You might be forgiven if you thought the difference in these approaches was that Andrew Cuomo is likely looking to seek higher office -- governor, if not president.
And that the good folks in New Jersey are looking to cover their behinds.
You might.
- New York State: "New York Widens Inquiry on Mortgages"
- New Jersey: "N.J. program offers 'rescue team' for homeowners in bind"
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