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 Foreclosure of Cristina Ramos from David Ramser on Vimeo.
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.
Richard (RJ) Eskow: How to Score a Foreclosure Fraud Settlement Deal
My family like the Ramoses experienced an increase in our mortgage after two years--our mortgage payments went from $2300/month to $3650. We paid that for five years (believe me it wasn't easy and we actually received foreclosure notices about 4 times). Now that the interest rate has dropped so much our variable rate mortgage has dropped to $1750 a month--now affordable.
So I do not "get" this.
Landlord analogy: you live in a house and know the landlord/owner because he bought it last month. He sells the house to someone who sells it to someone and this happens many times. One day, a stranger shows up, attempting to evict you by claiming she’s the landlord and owner. Aren’t you going to demand that she show you proof that she is the landlord before you move out? And if she can’t show proof she is the owner of the home you live in, will you move out? Of course not! She must prove to you she has legal standing to evict which means she must produce proof, the legal document. If she doesn't have it, you stay. The problem in the mortgage scenario is that judges and homeowners do NOT understand this and unless an attorney has been specializing in this field, they don't get it either. It's not the Ramos family -it's the bank fraud!
They bought a home for a set price and quit paying on it because it was suddenly not worth as much as it used to be?
Homes should be LIVED IN not used as investments. You bought it at 450,000 and now you want to 'rebuy' it at 175,000? Had the value gone up, would you have sold it to the next guy for the original value? You played the market, you lost. Sorry for you, but had the market gone the other way you would have laughed your way to the bank. It didn't, so cry your way to the bank and pay your monthly morgage.
Make decisions and live with them.
And yes, if you don't pay your mortgage, you will probably be foreclosed - no matter the color of your skin. Debt and bankruptcy is colorblind.
"LaTinos" were NOT the victims of some racist plot.
What WASdone to them AND MILLIONS of NON-"LaTinos" was that they were"approved"for mortgages that they did not qualify for under normal mortgage underwriting guidelines.
THEN aMASSIVE cottage industry of2nd rate mortgage-lenders evolved to provide mortgages to buyers (mostly NON-'La Tinos") on a national level.
Typical scenario went like this:
1. the home-buyers were bait and switched between the time they filled out their loan application at the "bank" from "fixed" rates to "adjustable rates, that they saw for the 1st time at the closing. This practice was rampant among these "high-risk" lenders who pushed these loans through the mortgage process when they KNEW many of these buyers would wind-up in default of their payments and then fall into foreclosure.
2. very little was done to check into the financial backgrounds of the applicants beyond asking them if they had a job (that day). NOcredit-checks, NO financial verification and ZEROreality checking into the already excessive debt load ofthese applicants.
3. MANY of these"lenders" wereMINORITY lenders who saw a vulnerable population and exploited it without regard to the effects these mortgage collapses would have on the individual,their future credit and their families.
THIS is more in-keeping with what happened and not theTacoBell version that is presented here.
I feel very bad about the Ramoses and people like them that are caught in a maze of decisions to make without clearly understanding what they are. There are Government programs out there that were designed to help you out with these hard decisions but I was very surprised to learn that they followed strict guidelines to qualify you and would not bend, even a little, if you did not fully qualify.
It is now too late for the Ramoses and the thousands like the Ramoses that lost their homes to foreclosures. 50% of them could have save their homes with some real help. The housing crisis could have been less severe if the Government Agencies knew what they were doing. On the other hand, there are still thousands of people like the Ramoses that could be helped.
Isaac Bensussen
San Diego, California