The Chicago Sun-Times is running three articles today detailing different instances of predatory lending: here, here, and here. Some of these loans financed by supposedly reputable lending institutions.
Take Anna Nelson, age 90:
In 1994, she made her first mistake, she admits.
She and her late husband owed just $5,000 on her house in the Roseland neighborhood. But a mortgage broker called and asked her to refinance — and roll in a few thousand dollars of credit.
She was stuck with something unbelievable — an $83,000 loan.
She didn’t know how it happened or how to repay it.
Another broker told her they’d help her get out of it by refinancing.
The loan grew again.
And that’s how it went for the last 15 years. Nelson had people virtually lined up to sell her new mortgages.
She refinanced at least four times, finally left with $125,000 in debt, of which she said she has only seen $5,000.
Dorothy Davis ended up owing $125,000 on a house worth $40,000:
“He came here and told me: ‘Sign the paper, sign it now.’ He kept insisting me to sign it.” Davis said. “Ever since then, I’ve been with no money.”
She didn’t know then that the loan was saddled with fraudulent fees. She barely made her payments.
Another broker came to the rescue, promising lower loan payments — and new aluminum siding.
Undergoing cancer treatment at the time, she was desperate to get out of a bad situation.
But Davis was scammed again.
The new loan took up to 80 percent of her income. “I couldn’t buy any groceries. I could hardly pay even half of my utility bills,” she said. “I prayed and prayed. Some nights, I couldn’t sleep.”
Before she knew it, she owed $135,000 on a home worth $40,000 that was paid off 20 years earlier.
What possible value would a foreclosure be to a lending institution in a situation like this? According to the Sun-Times, the issue of minority targeting has brought hundreds of lawsuits and the FBI has taken notice.
Perhaps even more tragic is the case of Rosa Dailey, 66, who now owes $154,000 on a loan she took out to repair her garage. “A broker on behalf of Argent Mortgage noticed her garage needed fixing and started calling her incessantly,” the story says. She explained that she couldn’t sign the loan without her sister, who was terminally ill.
Here’s where the broker went for the kill:
“No problem,” she said the broker told her.
He drove Dailey to the hospital with the papers.
“No sooner than did she sign it, she was dead,” Dailey said.
Now Dailey owes nearly $154,000 from a loan she claims was saddled in duplicate fees and a falsified income. The mortgage payments left her with little extra money. So she couldn’t fix her furnace after it went out last winter, and she huddled near a space heater in her bedroom, she said.
Can there be any doubt that deregulation has failed miserably? The unadulterated greed of the lending institutions is ruining people’s lives.