Clinton has also called for a three-month moratorium on foreclosures—a stand ACORN’s Shea found encouraging. But she has not taken a stand on Durbin’s proposal, and neither her Senate press office nor her campaign press office returned requests for comment.
So, when it comes to the bankruptcy law revision, Clinton has something in common with some on the other side of the aisle who regularly disagree with her: none of the Republican candidates for president have taken a stand on the bankruptcy proposal either.
Hopeless Cases?
Locally, it’s not clear what the counselors from the Center for NYC Neighborhoods could do for Hector Morera, Jr. that’s not already being done.
Morera, whose two sons are in military service in Iraq and Afghanistan, and whose 4-year-old daughter is blind and deaf, bought a newly built home in East New York in 2005 for $525,000. The real estate agent—who represented both Morera and the developer who sold the house—recommended a mortgage company called Whitman Mortgagee.
This is a common tactic that helped rope people into high-interest loans. “Mortgage brokers are very frequently represented by real estate brokers,” said Councilman Fidler. “There’s even a commonality of ownership. Lawyers get involved in that incestuous relationship as well.” Fidler thinks these relationships should be banned.
Morera was so excited to buy the house that he signed the papers almost without reading them. “I’m a master plumber,” he said. “I can tell what’s wrong with a boiler right away. But don’t ask me to understand a mortgage.”
His mortgage started at a reasonable-sounding 6.65 percent interest—giving him monthly payments of approximately $2,800 a month. Nine months after he got the mortgage, Whitman Mortgagee sold the loan to Option One. And this past March, the interest rate jumped. It’s been rising ever since. “The payment went to $3,000, then $3,200, then $3,800. Now it’s almost $4,100 a month,” said Morera. Even with a decent job coordinating construction for a real estate firm in the East Village, he’s fallen three months behind on his payments.
“When we’re children, our parents always wanted to get the American Dream. Now it turns out to be the American nightmare,” Morera says. His new dream is more modest: refinancing. “That would be the happiest moment of my life,” he said.
“The banks write these loans off, so why is the family paying the same amount of money on the loan?” asks Lionel Ouellette, executive director of Changer, the group that organizes against predatory lending. To him the major ingredient in a real fix is clear. “There need to be very serious write-downs that penetrate to the homeowner.”
