Washington - As the subprime mortgage market goes from boom to bust, U.S. Senator Charles Schumer Wednesday said that foreclosures will soar in upstate New York over the next two years, with more than 50,000 families in upstate New York at risk of losing their homes by the end of 2008.

The senator unveiled a plan that he said would ensure that the subprime lending market, which has been able to operate with little oversight from federal regulators – is finally scrutinized on a federal level. He outlined a plan to regulate “these rogue mortgage lenders, eliminate ‘liar’ loans” and establish a foreclosure prevention task force.

Schumer said the impending large number of mortgage foreclosures in upstate New York and across the nation can be directly tied to the exploding popularity of costly non-traditional mortgage products over the past decade. These non-traditional mortgage products, which include hybrid adjustable-rate mortgages with intricate interest rate terms and conditions, have been sold to middle and lower-income families in record numbers. While they offer attractive and easy lending terms, they also include excessively high interest rates that can sharply spike, leaving new homeowners struggling to meet rising mortgage payments. 

In an effort to protect homebuyers from usurious lenders and potential foreclosure – Schumer announced his plans for legislation that he said would stem the tide of subprime mortgages.

His three-point plan would establish a national regulatory system for mortgage brokers, eliminate “liar” loans and create a New York State foreclosure prevention task force.