Additional reporting by Jerry Waxman
Avery Salkey bought her brand new four-bedroom home in Palm Beach County for $234,550 in 2003. After making a substantial down payment on her mortgage, the bank gave her a fixed interest rate of 5.3 percent. The monthly payments came to $1,500, and Salkey thought she was in good shape.
Today, for the third time in a year, she barely prevented her foreclosed home from being auctioned away on courthouse steps.
Salkey's troubles started in 2006, when she took her car to the mechanic to deal with some brake trouble. The mechanic said Salkey's brakes were so messed up that he refused to let her drive the car off the lot, saying he'd be liable if she had an accident. The repairs cost nearly a thousand dollars, and, Salkey says, caused her to miss the deadline for a mortgage payment. It had taken her longer than expected to find a job after moving to Florida from New York, and cash was tight.
"Unacceptable," Salkey recalls being told by a bank rep, whose voice still rings in her ears. "Un-ac-ceptable." The bank refused the late payment and threatened to foreclose.
On the recommendation of her broker, Salkey refinanced with Yale Mortgage, a so-called "hard money" lender that makes loans based not on credit or income, but on the equity of the underlying asset. Yale gave her an adjustable-rate-mortgage starting at 10 percent interest. Salkey says the $2,800 monthly payments exceeded her monthly income, but, in a meeting Salkey says was attended by a Yale representative, the broker assured her she could refinance again on better terms after six months of timely payment.
After doing things the broker's way, Salkey says, she learned about Yale's way: Penalties on repaying a loan ahead of schedule made refinancing unfeasible. She made her last payment in August 2007.
The first foreclosure notice arrived last February. On the advice of a lawyer, Salkey declared bankruptcy. Association of Community Organizations for Reform Now, or ACORN, began directing media attention to her predicament, and Salkey's story was soon featured in news reports by the Palm Beach Post, National Public Radio and ABC News.
Near Thanksgiving, ACORN named Yale Mortgage a "Turkey of the Year" for its refusal to institute a 90-day moratorium on foreclosures. Salkey's foreclosure nightmare figured prominently in ACORN's press release. She had become something of a poster-child for the nation's foreclosure crisis.
"I started wondering, 'C'mon, could I be the only one in this situation?'" she says. She obtained a list of Yale mortgage holders. She started going down the list and calling each person, making a note next to each name: Disconnected...No answer...House to sell today.
"I started hearing things, and I wondered, 'How could this company be in business?'"
Salkey is convinced that Yale intended to foreclose from the start; throughout their financial relationship, the company sapped as much money from her as possible. A spokesperson for Yale Mortgage declined to comment.
The sale date was eventually reset for December. Salkey says she was able to convince a judge that she'd been given too little notice, and the sale was postponed to today, which coincides with ACORN's launch of their Home Defenders campaign.
ACORN members in seven cities across the country, including New York and Los Angeles, will band together in civil disobedience, refusing to leave their homes once they have been foreclosed.
With over three million foreclosures across the country since the beginning of the housing crisis, it has become more difficult to define foreclosures as individual recklessness. Homeowners unable to pay their mortgage are increasingly blaming their banks, which they accuse of pushing risky adjustable rate mortgages without fully disclosing the danger involved.
Some of these angry homeowners have become ACORN homesteaders, risking arrest in an attempt to negotiate their mortgage. ACORN intends to expand this campaign to additional cities across the country, eventually reaching a critical mass that can demand concessions from their banks or aid from the government.
Salkey, whose foreclosure was scheduled for today, had planned to be a homesteader on the front lines. But civil disobedience was not her first choice. On Tuesday, Salkey filed an emergency motion to prevent Yale from selling her home, on the grounds that Yale is refusing to negotiate a modification of the loan. The motion was denied, but the contract company servicing the mortgage for Yale called ACORN yesterday to say the sale would be postponed for 90 days after all.
"If it wasn't for ACORN I would not be in my house," Salkey says.
Salkey had planned to join ACORN protesters at the courthouse steps, but the protest was called off. Salkey says she plans to attend an ACORN event in Orlando instead.