foreclosure-sign-05-2008.jpgThe Indypendent has an in-depth look at how the rash of foreclosures across the country rooted in subprime lending has hit minorities much harder than other racial/ethnic groups hardest. Here in New York, subprime loans made up 27 percent of refinances last year. People of color are more than three times as likely to hold subprime loans as non-minorities, and one in four homeowners with subprime mortgages in Crown Heights and Bedford-Stuyvesant, predominantly black neighborhoods in recent decades, were in foreclosure last year, according to federal data. If you were a profiteer looking to make money, you’re going to go into these communities with instruments that make refinancing or ownership look much more attractive, says Dr. Julianne Malveaux, economist and president of Bennett College for Women in North Carolina. And you’re going to do that by taking advantage of a historic antipathy between the black community and banks. The article tells the story of a black senior citizen who’s owned a home in Crown Heights since 1975. He was sold a subprime mortgage re-fi in 2006 with a rate that skyrocketed after a six-week teaser period at 1 percent. The homeowner, who suffers from dementia, now faces foreclosure. The broker who sold him the ARM got a $6,675 broker’s fee and another $14,420 from IndyMac for hawking a No Income No Asset Loan.
Facing Foreclosure [The Indypendent]
Photo by dominic bartolini.


What's Your Take? Leave a Comment

  1. Congress needs to investigate and the public needs to be WARNED about mortgage lenders’ practice of filing falsified IRS tax form 1099-A’s or 1099-C’s. To illustrate, here is a portion of my statement concerning Wells Fargo’s false 1099-A, as well as a link to entire actual statement posted at: http://www.lawgrace.org/2008/08/08/my-august-8-2008-statement-to-the-louisiana-secretary-of-state-office-of-financial-institutions-concerning-wells-fargo-irs-and-mortgage-frauds-sham-foreclosures-and-judicial-collusion-and-national-app/
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    This Financial Office mistakenly thought a complaint was filed concerning my property; and on July 30, 2008, Ms. Kathy Drzewiecki sent a responsive letter on Wells Fargo’s behalf. . . .As your records show, GE Capital Mortgage Services, Inc., became defunct in year 2002 when it merged into GE Mortgage Services, LLC, its “successor.” Therefore, it is impossible for foreclosure auction to have LAWFULLY been carried out in year 2005 on behalf of the non-existent GE Capital Mortgage Services, Inc. Also, contrary to what Ms. Drzwiecki wrote, it is NOT POSSIBLE in year 2005 for Wells Fargo to continue being the “mortgage servicer” for non-existent GE Capital Mortgage Services. Furthermore, if my property was (impossibly) ACQUIRED by GE Capital on May 19, 2005, there is NO LAWFUL REASON for the IRS form 1099-A to exhibit Wells Fargo’s name!

    Another thing Ms. Drzewiecki’s letter failed to state is that I initially acquired my residence property in 1993 through AmSouth Bank. For home improvement in 1999, I refinanced it with GE Capital. I had equity in the property, and I never had a subprime loan. (Marriage failure caused me financial ruin; and crooked deals in Family Court sealed my fate.)

    On the other hand, facts overwhelmingly demonstrate that, using defunct GE Capital’s identity, debt collector attorney Herschel C. Adcock, Jr., fraudulently seized and acquired more than $80,000 when he flipped my property. Also, contrary to the form 1099-A, the Fair Market Value was not $12,000 -as manifest from the year 2005 sale price for which that property was sold in that same tax year purportedly to a third party.

    A lot of foreclosed former property owners will one day discover there is a 1099-A or a 1099-C for which the IRS wants answers! If that 1099 is replete with false information, there could be severe tax effects and a lot of needless untangling to be burdened with.

    Across the country, foreclosures have been halted because “real party interest” was absent from those foreclosure proceedings. Yet (in Louisiana), it would not be farfetched for foreclosures to become filed in the name of ‘Mary had a little lamb’, and judges allow peoples’ homes to become seized.

    from Barbara Ann Jackson (www.lawgrace.org)

  2. there was a day not too long ago politicians were crying that minorties were not offered loans by discriminating banks. now they cry that these people got screwed by loans they took from banks. be careful what you wish for. no wonder why sharpton still has meaning to people. because there are a ton of stupid ones out there who actually listen to him!

  3. I don’t think anyone should imply from this disgraceful statistic, that monorities are either more ignorant, or greedy, than anyone else. However, regarding senior citizens, the fact remains that most of them bought properties in neighborhoods that banks wouldn’t touch, during times when these neighborhoods were not receiving their share of city services, policing, sanitation, or any media attention except bad. These now senior home owners often came here from the South, and were often not well educated, but had steady blue collar jobs, worked like crazy, paid their bills, and paid off their mortgages.

    I think there should be a LAW on the books that stipulates that any major real estate transaction has to include a legal representative on the side of the buyer of a loan, mortgage, etc. They can be a paralegal, some kind of community organization specialist, or a lawyer, but there must be someone looking out for the borrower. These documents and agreements are not written to be user friendly, and can easily be drawn up to hide details that can come back to haunt a borrower, and cause them to lose their homes.

    Bilking senior citzens should be a crime. While foreclosing on the greedy may seem to be a victimless crime, it also costs the rest of us in lowered neighborhood property values, higher insurance and RE rates, and also in the intangible loss of crediblility to needed RE professions and services. Not every mortgage broker is a crook, and not all people who overspend are greedy morons. This entire industry needs more checks and balances, or the problem will persist, especially as the shift back to cities increases.