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The Truth Examines Despicable Lending Practices – Part 3 –
Mortgage Predators
By Zahra Aprili
Sojourner’s Truth Reporter
We all know the proverbial saying— “Home is Where Your Heart
Is.” But that does not actually answer the question “What is
a home?”
The word home refers to the shelter where a person, family
or group of people live. Depending on where the home is
situated in the United States, it could be in the form of a
detached house, town home, condo or apartment building. Not
only is that definition broad and general, but it also lacks
emotional perspective! Let’s be specific, shall we? Let’s
look at our immediate area – northwest Ohio. What does the
word HOME mean in here?
For Sally (not her real name), a young mother, home is a
parcel in South Toledo that has a brick one story house and
detached garage. The house has three bedrooms and one and a
half baths. It is a piece of property and the house on that
property, where she felt secure. So secure that it was the
place in which she wanted to dwell and raise her children.
For reasons unavailable to this journalist, Sally entered
into an informal written agreement with a local property
company for the purchase of the house previously described,
for an agreed price of little over $15,000 in early 2014.
Court records indicate that Sally paid the company
approximately 36 percent of the purchase price upon entering
the agreement. Sally and the owner of the property company,
Mr. -------, met downtown at the Government Center to fill
out forms and other documents needed for the sale and
purchase. For the period of one year, she made regular
monthly payments on the house and two additional lump sum
payments. Mid-year, 2015, Sally made her final payment
fulfilling the purchase agreement and completing the
purchase of her first home.
Unfortunately, Sally’s story is not over. Instead of the
feeling of accomplishment, satisfaction, and security that
accompanies home ownership. Sally faced betrayal and deceit.
A month after making her final payment, she was contacted by
Mr. ------ who demanded more money from her for the purchase
of the house. Sally refused and three days later a
fraudulent Quit Deed Claim was filed transferring the
property back into Mr. ------ name. It turns out that while
both parties were down at Government Center at the
commencement of the transaction, Mr. ------- instructed
Sally to sign this form and later discovered that:
“Unbeknownst to Sally, Defendant --------- secretly retained
the Deed and later had it notarized outside of Sally’s
presence and without her knowledge.”
One day after, filing the Quit Claim Deed, Mr. ----------
began eviction proceeding against Sally and her children.
Around that same time, Sally went downtown to secure a copy
of her deed, where she learned that the house was no longer
in her name.
Sally was smart and she did not let herself get bullied. She
kept copies of all her payment receipts; she filed a police
report and contacted Legal Aid for help. It is 2017 and
Sally is just starting to see the light at the end of the
tunnel. Her case was recently scheduled to be heard in court
and we hope that the outcome is in her favor.
Sally’s case is just one example of how the dream of owning
a home can go wrong. Unfortunately, she is not an exception
to the woes that plague potential homeowners in Toledo.
A number of questions spring to mind about why Sally ended
up with a loan from someone whose business practices either
could not be verified or were blatantly not above board?
Why not obtain a mortgage from a conventional lending
institution such as a bank? Had Sally applied for a
conventional loan and been turned down? Or, had Sally, aware
from past experiences or interactions with others in her
neighborhood or of her background, assumed that an
application for a bank loan would not go well?
Below
is a 2012 Fair Housing map of Lucas County. The areas
highlighted are Low-Income and Moderate Income census
tracks. The dots represent bank loans for home purchases. In
2012, two percent of local bank loans in Lucas County
originated in low-income and moderate-income census tracks.
These census tracks are predominately minority. What is the
justifiable explanation for that number being so low?
Below, in this 2014 Fair Housing Map of Lucas County shows
loan originations in the predominately Minority Census
tract. In 2014 there was virtually no lending occurring with
minorities in Lucas County. ZERO. How is that the case when
we know that in 2014 people like Sally were living, working
and purchasing homes in the area?
NOVEMBER
DECEMBER
The information above is a summary of financing statistics
for the months of November and December, 2014 from
the
Northwest Ohio Real
Estate Information Systems' (NORIS.)
Why was there no lending originating from local banking
sources in these minority census tracks?
According to Jen Teschner, senior manager of Systemic
Investigations for the Toledo Fair Housing Center, given the
availability of houses in low-to-moderate income
neighborhoods and the population therein, the equitable
amount of loans in these neighborhoods should be in the area
of nine percent. That was the goal that Fair Housing was
shooting for, and could see some progress in attaining, in
the years prior to the great recession that began in 2008.
“We felt lenders were making progress in proportional
lending,” says Teschner. “Since the great recession, lending
has come back, but not proportionally in communities of
color.”
Yes, houses were being bought and sold in northwest Ohio. In
November of 2014 there were 205 conventional loans and in
December 210. But none of them were from local banks to
minority customers. Theses graphics show Lucas County went
from two percent of loans going into minority census tracks
in 2012 to -0- in 2014. The 11/2014 and 12/2014 tables are
only a snapshot, 1/6, of the disproportion that occurred in
2014.
So, what is a home? Most would agree that the definition
given at the start of this piece is an accurate definition.
It is the place you are building your memories. It is the
security of knowing that the place you lay your head is
yours. It is the individual and family wealth that you are
building.
However, on some streets and neighborhoods in the City of
Toledo, County of Lucas, it is an illusion. An illusion
fueled by institutionalized discriminatory practices. An
illusion enabled by the abandonment of community and local
financial institutions removing their accessibility from
would be borrowers. An illusion clothed then stripped by
mortgage lenders that did not care about the effects of
their practices or impact on the communities they entered.
Illusions spun by mortgage lenders like American Equity
Mortgage and Beneficial, companies who are known to have
participated in practices that have been labeled predatory
in function.
FIRST TIME HOME OWNER? FINANCE, REFINANCE, HOW ABOUT A HOME
EQUITY LOAN FOR SOME IMPROVEMENTS? Sign Here, Here and Here.
Psst…If you are elderly or a person of color we especially
want to help. Why settle for just an equity line, let us
show you our platinum refinance plan.
Did you sign for a “quick” mortgage that had no documents or
papers? Did a representative convince to you go with a loan
product that you did not initially want or need? What about
an interest only loan or a loan that has huge end of life
payment, known as a “balloon” payment? Have your payments
been properly credited?
Unjustified fees; inflated interest; including the debt from
unsecured sources like credit cards or medical bills;
inflation of “points” or what the lenders fee is for making
the loan; penalties for early repayment or prepayment, are
all examples of practices that mortgage lenders used to
increase their profits while subjecting unsuspecting
consumers to unjust lending terms. Have you been victimized?
Take the time to look at your current mortgage; it is not
too late to seek help. If you have not purchased a home in
Toledo using financing, you now have some background. When
it is all said, and done, having a home and keeping it
should never be an illusion or just a dream. It should be a
reality.
Ed Note: This is the end of Part 3 of our series on
predatory lending. Part 4 will start next week focusing on
predatory lending in auto loans.
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