There's a dirty little secret behind the so-called renaissance taking place in many of New York's neighborhoods. Formerly undesirable areas like Bedford-Stuyvesant and Bushwick in Brooklyn, now deemed hot because they have attracted the attention of real estate agents and middle-income home buyers, are, not coincidently, experiencing home foreclosures at alarming rates. Triggering many of these foreclosures are variations on abusively high-cost mortgage-lending and deceptive real estate practices that literally rob people of their wealth and their homes.
  
In the past, state government has summoned the will to address the scourge of what is now commonly known as predatory lending. This kind of leadership is needed once again, as Gov. George Pataki has a chance to sign into law a bill that will greatly aid in the fight against predatory lending.

Abusive mortgage lending is nothing new. For years, what's known as sub-prime mortgage outfits have been descending on low-income neighborhoods and communities of color, making mortgages at high prices in markets long neglected by banks. Unscrupulous brokers and building contractors often colluded with these sub-prime lenders to lure elderly homeowners and others into fraudulent home improvement deals and refinance loans using promises of "fast cash." These loans were ultimately made based on how much equity could be stripped out of a home, using hidden fees and excessive interest rates, rather than what a borrower could afford to repay.

These lending practices led to a rash of foreclosures and prompted legislation in New York in 2002 that almost single-handedly forced predatory refinance lending into retreat. But like real estate, scammers have assumed new forms. And now in New York a different set of predatory real estate practices is reaching epidemic proportions.

One strain of predatory lending, called "property flipping" scams, targets first-time homebuyers. This practice features one-stop shops in which brokers, lenders, inspectors, appraisers and even attorneys conspire to paper over structural flaws in a house, overstate its value and set up the buyer with a grossly over-priced mortgage.

Stuck with a mortgage they can't afford, a bad investment, and a crumbling home, the homeowner typically falls into financial crisis, thus making him or her a target for yet another predatory real estate practice referred to as deed theft or foreclosure rescue scams. Deed theft involves con artists who offer to bail homeowners out of their impending foreclosures. The scammer ends up deceiving homeowners into transferring over ownership of their home to another party, with the promise that they can buy back their property later. This buy-back never happens. The homeowner is often evicted instead.

According to RealtyTrac, which monitors home foreclosure rates nationwide, foreclosures in New York increased 32 percent in the last year, with foreclosures in Brooklyn alone increasing 20 percent. Property flipping and deed theft scams help explain why. Property scams contribute to the rise in housing prices and the displacement of longtime residents; predatory lending is the midwife of gentrification.

Some community-based organizations are providing anti-predatory lending education and counseling to prospective and existing homebuyers. There is even an anti-predatory lending initiative that uses New York City's 311 help hotline to direct people facing foreclosure to financial, legal and counseling resources.

These efforts have helped people protect themselves, yet once a homeowner faces foreclosure, it is difficult to reverse the process.

New Yorkers for Responsible Lending, a coalition of 120 groups statewide, promoted strong anti-deed theft legislation. The Assembly and Senate unanimously passed the Home Equity Theft Prevention Act. This bill would make it a felony to steal someone's home through deed theft. This bill should be an easy one for Pataki to sign, because it defends a person's right to work hard, acquire property and live out the American dream.

Chances are, real estate speculator rats will learn new tricks. But as long as working families fall hopelessly into debt and get run out of their homes, it will be up to government to protect them.