Many Guyanese in New York have been hit hard by the US economic meltdown, losing homes, jobs and pensions due to bad mortgages and risky investments that did not pay off.
Faced with soaring food and gas prices, they are cutting back, making adjustments to their lifestyle, while trying to protect their dreams of a better life for their children. In Guyana, the impact of the financial crisis has not had a huge effect on remittances as yet, although it is believed that it will be felt soon. A local cambio dealer expects the slump in the US economy to be felt by the middle of next month. Now, she said, her business is experiencing just about a two to three percent decline in money transfers from the USA.
In 2000, a census found 130,496 Guyanese-born residents living in New York City. Licensed real estate broker and writer/artist Edgar Henry said the crisis has taken a heavy toll on Guyanese and other Caribbean nationals, particularly in the housing sector. He said a number of Guyanese who went into purchasing houses “were caught with their pants down.” He knows at least ten Guyanese who were affected to varying degrees on home purchases but he believes there may be many more. They were affected mainly on account of bad mortgages due to predatory lending which was unregulated and they have no choice but to walk away from their homes.
While the real estate business has been badly affected since people right now do not want to take chances, he said, “I am rolling with the punches.” He said that during the time of plenty he had invested in other businesses in which he is part owner and some of them were now proving worthwhile. “I will ride it out,” he said referring to the financial crisis.
As a real estate broker, he said that getting the best terms on a mortgage now requires a high credit score, a substantial down payment, full documentation and solid financial reserves. However if time is on one’s side, he said a purchase now could improve their position. “If you need a loan now and have less than stellar credit or a minimal down payment, ask your broker about mortgage insurance,” he said.
He added: “If you can’t make a mortgage payment, don’t be shy, call your lender. Banks and lending institutions do not want to own your home, and the sooner you call the more options they can offer to cure your problem”.
Henry said that no one can deny that times are tough due to the financial meltdown which has resulted in recent mergers, thousands of layoffs, the Merrill Lynch, Freddie Mac and Fannie Mae fiascos, coupled with the proposed government bailout of the world’s largest insurance company AIG. He expects that remittances to Guyana and barrels and packages sent to Guyana from New York would decline in the coming months.
America is struggling with soaring prices, mounting debt, a volatile stock market, housing woes, and fluctuation of fuel prices, he said adding that in spite of the gruesome economic situation and the terrible ricochet effect on every phase of daily lives “we still have to find ways and means to survive. It is imperative that we cut costs, retire when our nest egg has taken a hit, pay back student and car loans and at the same time avoid foreclosure.”
For a woman who asked to be identified only as Sonia, the crisis has meant becoming the sole breadwinner for her family. She left Guyana three years ago to join her husband and two children in New York. In the first year and a half after she arrived in Brooklyn, Sonia and her family lived in the basement of her in-laws. She worked at two jobs to help her husband “to pay down” on a house so that they could eventually move out. Her husband was forced to take early retirement so as not to lose out on some of his benefits. While that might have been good, Sonia said he has lost substantial money on investments he had for their children’s education. She did not say how much was substantial. For now, she is still holding down two jobs: as a clerical assistant during the day and as a caregiver in the evening. She and her husband have had to “give up” the house they had mortgaged in Queens and they are now back in her in-laws’ basement; a situation which she does not like. Sonia wants to come back to Guyana but her husband does not, she said. One good thing that has come out of the financial crisis, so far she said, was that he has stopped drinking. He now tries to be more understanding to her, since he has all his family in New York and she had no one but him and the children.
Suffered heavily
In a telephone interview with the Stabroek News, investment banker Carlyle Stewart said he has suffered heavily in the markets, losing about US$100,000 on an investment in equity. “For me, it is painful,” he said. The loss, he said may not be a big deal on the part of market volatility, but he called it a huge loss for him considering the impact on his future plans, including vacations, tuition fees for his children and his general lifestyle.
On the real estate front, he said everything was safe with him. But he feels those losing homes, especially in the Jamaica and Liberty areas were due to “very bad financial decisions because they do not understand the markets and financial strategies.” On Monday, he said a number of houses on one block in Queens – where a number of Guyanese and Caribbean nationals live – was boarded up. “They had just lost their homes or they had just walked away from them. They cannot meet the mortgage, which in some cases are less than the mortgage balance. They might as well give up. Real estate value has depreciated,” he said.
Stewart, who has worked with the investment bank Barclays Capital for over a decade in various capacities and is on the trading floor for fixed investment income, expected to make back some money when the situation gets stable but described it currently as discouraging. Losses were part of the risks on the stock markets, he said.
Via e-mail, Editor of the Caribbean Voice in New York Annan Boodram told the Stabroek News he has lost directly through his accounts. He also lost out US$8,000 from a college fund for his son. Boodram, who is also teacher, said his income has not been affected directly since his job was contractual. But with the cost of basic groceries and other consumables having gone up, he said: “We pay more for less and we have to restrict some purchases while eliminating others.”
To deal with the impact of the crisis, he said he was trying to exercise more caution over spending and is being more conservative, generally.
In New York, he said some Guyanese have lost homes, while some of their homes are in foreclosure; and some who rent homes are being scammed and find themselves being evicted.
“Some have lost money on their pension, retirement investments or commercial investments. They have to deal with higher prices. Some have lost jobs while others are struggling – those in real estate, travel financial investments for example. They travel less, entertain themselves less, are more cautious in spending, bargain hunt, buy less, etc.”
He also said some businesses owned by Guyanese, particularly in the Brooklyn area, are closing.
Trade union activist and teacher Chuck Mohan lost US$10,000 on his Individual Retirement Account and his 410K Savings Plan. A friend of his has lost US$46,000 on similar retirement plans. He is a teacher and does not expect to lose his job since his skills are more or less needed.
One of the things to consider is that these poeople that were subjected to predatory lending practices actually got the better end of the bargain. they were able to move out from their basement rentals and ‘buy’ a house with no money down. The closing costs were added to the purchase price so they initially put no money into the deal for a house costing $400k-800k , The initial repayment plan was set at interest only (principal payments deferred until 3 years later when the loan resets.) also, the interest rate was at the adjustable rate which was again lower than a conventional fixed mortgage rate.
All this menat was that renters who were paying $850 -$1,000 per month were able to (buy) move into a house for monthly mortgage payments , albeit , interest only for between $1,500 to $1,800 per month. Now these renters became landlords and rented their basemnts for $900 to $1,000 and therefoe, with that income was bale to pay meet their mortgage paymentsof $1,800 and still realizing a net cash flow benefit of $200 per month.
However, since the loans reset, principal payments and adjusted interest are now payable monthly in the new mortgage payments of $3,000 to $3,500. This now leaves the “homeowner” with anegative cash flow of $1,200 to $1,700 per month. That ’swhy they are defaulting.
So these people actually gained by living in luxury for two to three years for the same rate they were paying for their basement rentals, The banks are the ones that lost out big time here. I was employed as a Vice President at Lehman Brothers. You can draw your conclusions as to my losses.
These people will now return to rentals or take their chances, pay something so they don’t get evicted and wait for the McCain bailout of individual homeowneres whereby, their principal will be negotiated downwards by hundreds of thousands or tens of thousands of dollars and they can saty intheir homes. To do so, they’d have to vote McCain as Obama’s plan does not givethem this windfall
Dan,
I must admit that you are being kind of condescending here, and that is the only thing that convinces me, that you are most likely what you said you were. Typical wall street type.
Immediately, your attitude is that these subprime homeowners, emerged out of basements, and you are suggesting that they were offered the good life, however briefly. It is that same kind of cocky attitude towards main street that caused Lehman Brothers to collapse, and catapult you off your high pedestal.
I sense, your bitterness towards these unlucky homeowners, but it was also the unbridled greed of your company that caused its own demise, and good riddance.
Welcome to mainstreet, my friend.
Joe.
You made bad decisions with Lehman, now you are engaging in a McCain plan that even has the Grand Old Party curious about his mental state. Wake up! Obama is the only solution bro.
According to you, vote for McCain and pass the bad dedt outo our children. Obama wants Americans to pay as you go. The Republicans have a policy of spending now and worrying about paying later, which has not happened, then when the Domocrats have to raise revenue to pay for their debts, the Republicans label them as tax and spend Liberals. Guess this is what you believe in there Dan.
Obama’s plan as it specifically relates to the foreclosures is to offer a three month moratorium on payments. Well, that is only postponing the inevitable. The homeowners, who are going into foreclosure, cannot make their payment because of the fact that they could not in the first instance or because of lay-offs resulting from the failure of Bear Stearns, Lehman, Merrill, AIG, WAMu and others.
Three months down the road, it WILL become a taxpayer problem when Obamai s safely in the White House.
McCain is saying to have the Property revalued – from $1mln to $650k. Use $300 bln of the $700 bln package to pay the bank the difference on behalf of the homeowner. The homeowner now has a mortgage of $650k for a discount of $350k. Were you that homeowner, wouldn’t you vote to McCain versus a tax cut under the Obama plan of $3k a year if you are working for $125k and under a year where most people in this foreclosure problem would be.
$700 bln and counting is already committed. So McCain’s plan is to use $300bln to pay off the mortgages of those who cannot afford it so that they do not lose their homes andthe bank does not lose either. In any event, the money, as all of you know, would go to Wall Street. Instead of it going directly to erase the losses of the companies, why not benefit the homeowners who are probabably net tax payers.
If you were in this situation, you would see that the Mccain paln benefits you most now and your children in the future, You would not like this plan because you would not like the government to pay off your neighbors mortgage while you are paying yours from your hard earned dollars. But think about what foreclosed and boarded up properties does for the rest of home values on the block and the same neighborhood.
Guys, which ever way the wind blows, those two guys are set for life, they are both willing to tell us what we want to hear until they get into office, then see ya later, alligators.
Joe.
what do you think the credit cards for, buy now worry about payment later.
my policy is, hang your hat where you can reach it.
IT IS HARD RVERY WHERE FOR GUYANESE. IT MIGHT BE LOSING HOMES AND JOB IN NORTH AMERICA BUT IN OTHER PARTS THEY ARE LOSING OTHER THING LIKE THEIR DIGNITY BUT I MUST SAY GUYANESE PEOPLE WHERE EVER YOU ARE DONT GIVE UP
I agree with you 100%. That why if I can’t make it in North America, I am going back to Guyana. So my hats off to you being where you are. It is not easy being a Guyanese that country.
Sorry folks, but I am not suffering from this meltdown. The reason why Guyanese immigrants are suffering is not because of the meltdown is because of their own stupidity. Traveling home as soon as they arrive in the country — I don’t know how some of them can do that and still have a job. And bring familes up when they don’t have a decent place to live and have to work two/three jobs instead of working one so they can find the time to go to school and educate themselves. Not to mention trying to upkeep two households one in America and one in GT. People should stop lying to those back home by telling them things are good in America.. I am voting for Senator McCAIN. Period. Not Mr. Obama. His lack of Executive experience is frightening and the Presidency is no place for OJT. This guy does not have it. He refused to acknowledge that the surge is working and the sacrifice our service men and women are making very day for the freedom we enjoy today. He will loose come 4 Nov. Guyanese need to get out of Brooklyn, New York. The majority of them refuse to live elsewhere. What a shame. I’ve travelled the length and breath of this country and have lived in small town Aemrica that would freak out a lot of Guyanese. I’ve lived in Germany, Seoul Korea, London England and their is no place like America. Period.
I must admit that I agree with the notion that Guyanese should educate themselves more. However I disagree with you because of your military background that you prefer McCain over Obama. This war that lost over 4 thousand lives because of a LIE and you are ruffled over a surge that slowed the bleeding (that is all it did). Your commander in chief had eight years of experience and what happened.
Look, simply put, WE ARE TIRED OF THE SAME! I am willing to wager you (even though some folks in this country are dumb) that John McCain will not prevail! I am sorry too, but you may have to think of returning to Guyana after all (lol).
F-22, I have lived in small town America since 1972 when I joined the Military and will always visit NY. There is no other place like this. I have also lived in all the countries you mentioned while on active duty for 28 years, and yes it is good to live in the US, but I have found other places that I could live, like Turkey, Germany, Switzerland and Japan. What experience does it take to be President? Ronald Reagan was a govenor before he became President, he left us with a hugh deficit. Then Bush 1st took over and extended the deficit. Bill Clinton came in, balanced the budget, left us with a surplus, which was gone before the end of this Bush’s first term. John McCain was an Bank executive during the other finiancial diaster when several Savings and Loan failed, before going to Congress. Now this is the guy you want to put in place to run this country? You must be joking. He supported the wrong war. Sadam did not bomb the US. Osama is not in Iraq. We were to go after him. We went to Iraq under false pretense, just like we did in Panama and Grenada. Get it right guy. Powell told them not to go into Iraq, they did not listen. Now we are talking about the surge. There should have not been that war period.
THERE IS NO PLACE LIKE HOME-GET YOU R NICHE BRO
I am not a military man, but I have been both poor and… comfortable, and neither experience has thought me the kind of partisanship that is necessary for one to vote for McCain. McCain subscribes to the philosophy that ‘they that are sick do NOT need a physician, only they that are well. I am not condoning incompetence or laziness or siding with any kind of arbitrary ‘wealth redistribution.’ I just have this thing for level playing fields.
Whatever McCain once was, his campaign has demonstrated that he is no longer able to manage – not his crowds, not his message, not his staff. His decisions come crunch time have been unsound: Palin, campaign suspension, etc. The man wants closure for a long and bumpy career. And I sympathisize. But we need stronger hands on the wheel come 2009.
F-22 you make some good points, especially when it comes to the neighborhood factor. Im guyanese, and i used to live in Richmond Hill; about 7 years ago we (my family) left NYC and moved to Michigan. Yep I said Michigan, only because my Mom’s brother lived down there and believe me it much more easier to live down here opposed to New York. I mean you always hear stories of how hard it is for Guyanese Immigrants to come in New York and make a proper living. Just refer back to the part when Sonia stated how hard it is, working two jobs and trying to make a living but the money is not adding up. You see, my main point is that because NYC is the epicenter of our guyanese community we tend to try our best to live there when it ain’t even working. Many of us have families in other states in the U.S., we don’t need to make ourselves suffer in NY, we should look elsewhere, where our hard work can go much farther. A good example is house markets, in michigan you can get a good house, with a good neighborhood and schools for about $120,000 as for NY you have to pay about almost 4 times that amount plus the schools you have to worry about. We need to wake up and make the right decisions for our future and not make excuses because of the economy.
Guyanese are a resolute and resiliant people and when things are bad we dig in and find a way to survive. Many of us would like to return home and help with the development but there are too many hurdles when u get there. Then there is the prospect , that when you are in guyana of being kidnapped for ransoms. Its nice being when u were borned but the situation has to change and that doesn’t look like it will happen in the near future.
IF WE STOP DRINKING ALL THAT RUM AND FRIED FISH FU CUTTERS YOU ALL MIGHT HAVE MORE MONEY LEFT BACK
Quick question: Isn’t this suppose to be Mr. Vishnu Bisram’s story? I mean, c’mon, Bisram is the Go-to guy for the buzz in the Guyanese community in New York. At least that’s what Non-New Yorkers are supposed to believe.
I guess Ms. Rose sneaked into town and grab this piece while Mr. Pollster was busy working the questionarie.
Nice story though. Thanks Stabroek News.
Nothing lasts forever!
wow thanks…i just learned something new
MY fellow Guyanese the barrels will be less and the lines at western union will be shorter this year cause Uncle Sam is bleeding but with Obama in the white house next year -We will be able to start rolling those barrels and dishing out the doles next year-When AMERICA is in problem the whole world is in trouble
Those who lost and decide to remain – hang in there -don,t be a quitter -TOUGH TIMES NEVER LAST TOUGH PEOPLE DO
To those who decide go back home if you can make a difference go ahead and help build Guyana for charity begins at home and when the party is over there is no better place than home
I lived in the u.s for about 30 years i have seen good and bad times, things are tight with us right now. but it will get better, no matter howopw hard it get,s I rather stay in the u.s and ride the storm,than return to guyana my worst day living in the u.s., would be better than my best day in guyana. I will ride the storm because I know it will be over. America is a strong nation and we will get pass this. People do not forget u.s. came back from the great depression.