LOS ANGELES -- On Monday, the home of Cristina Ramos will go up for auction in the Norwalk courthouse. This weekend marks the third time that Ramos, a housekeeper, and her husband Jose, a housepainter, have held their breath hoping the bank will reschedule the sale of their foreclosed home.
The Ramoses are representative of a broad trend in California: Homes belonging to Latinos have been foreclosed at a higher rate of frequency than those of any other minority group.
The Ramoses bought their South Los Angeles home six years ago with $15,000 down on a $425,000 sale price. The value of their home has plummeted to $175,000. Attempts to refinance their loan have failed. When the couple stopped making house payments in late 2010, nearly one eighth of all homes in California were in foreclosure, according to a report by the Center of Responsible Lending. Mirroring the situation of the Ramos family, the wealth of Hispanic households nationwide declined by 66% between 2005 and 2009, the most of any ethnic group, data from Pew Research shows.
In his State of the Union address last month, President Obama said, "We've all paid the price for lenders who sold mortgages to people who couldn't afford them, and buyers who knew they couldn't afford them." In the Ramoses case, they believed -- and were led to believe -- they could afford their home. Five years later, they could not.
Cristina and her husband applied for a loan modification through President Obama's program. They didn't qualify.
Obama's new plan is to give "every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates," he explained in the State of the Union address. It will undoubtedly face opposition from Republican lawmakers. "None of these programs have worked," said House Speaker John Boehner yesterday.
The couple settled on South Los Angeles because it was the cheapest area they could find. It was all their salary could afford, Ramos said.
Their realtor, Julio Carrasco of Coldwell Banker, first took them to a bank to apply for a loan. They were turned down. Then he took them to Countrywide Financial. They qualified.
The couple are unhappy with Carrasco, who declined to comment on this story. They feel he was not forthright about their situation. "We came to him and said, "we have $15,000, can we buy a house," and he said, "No problem," Cristina explained.
They feel they were led to believe they could afford a loan that they actually could not.
Jose Ramos said the couple stopped paying their loan for several reasons. To begin with, the loan was variable and eventually rose to $3,000 a month from $2,300. That didn't seem fair, they said. "Then we tried to get a loan modification, but in order to get a loan modification, you have to stop paying," he said. Moreover, "I was having trouble finding work and basically stopped getting work altogether after the market crash," he said.
After Countrywide went bankrupt in 2008, Bank of America bought the mortgage from the former lending giant. A year ago they issued the couple a foreclosure notice. In December, Bank of America paid $335 million to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers during the housing boom.
The Ramoses tried three more times to get loan modifications. At one point, a man approached them with a promise to help them get a modification if they paid him $1,500. They paid him, and he disappeared.
While they anticipate the sale of their home Monday, they remain hopeful that a final attempt to refinance their loan through a company called Golden Empire succeeds. They would gladly buy the house for $175,000 if they could.