Rss Feed
Tweeter button
Facebook button
Technorati button
Reddit button
Myspace button
Linkedin button
Webonews button
Delicious button
Digg button
Flickr button
Stumbleupon button
Newsvine button

Report confirms root of Detroit foreclosure crisis

detroit_0708A powerful report on Detroit’s foreclosure crisis was published in the Detroit News June 25-27. (See The articles were the product of months of investigation by reporters Joel Kurth and Christine McDonald. They document what Workers World newspaper has stated for years: The banks are responsible for the destruction of Detroit’s neighborhoods and the loss of 240,000 residents since 2005.

McDonald and Kurth set out the following facts:

1. More than one in three Detroit homes have been foreclosed in the past 10 years. Since 2005, 139,699 of Detroit’s 384,672 homes have been foreclosed because of mortgage defaults or unpaid taxes.

2. There have been 65,000 mortgage foreclosures since 2005. This doesn’t include so-called zombie foreclosures in which lenders initiated foreclosure, and may have evicted tenants, but abandoned proceedings before they were complete. Zombie foreclosures were more prevalent in Detroit than anywhere else in the United States.

3. Fifty-six percent of all mortgage foreclosures are now blighted properties or have been foreclosed again for nonpayment of taxes; 13,000 homes are slated for demolition at a projected cost of $195 million.

4. Of the 84,000 properties on the city’s blight list, 76 percent are foreclosures.

5. Homes sold for $22,000 on average in Detroit in 2014, down 73 percent from the peak before the housing crash and the lowest among 50 big cities. Detroit’s decline in property values cost homeowners an estimated $1.3 billion in lost personal wealth.

6. Detroit’s population fell by nearly 240,000 residents from 2000 to 2010, with the bulk of the population loss occurring after 2005.

How did the crisis happen?

Kurth and McDonald show how mass foreclosures in Detroit were a direct product of massive subprime lending in the city. Of all mortgages written in 2005 in Detroit, 68 percent were subprime, compared to 27 percent statewide and 24 percent in the U.S.

Subprime loans have interest rates at least 3 percent above benchmarks established by government and various lending indexes. In Detroit, however, the interest rates were far higher. Subprime loans were usually written with low initial teaser rates.

These low interest rates would soon adjust upward to an unaffordable payment for homeowners, leading to mortgage defaults and foreclosures. Many studies have documented how people of color and women were targeted for these predatory subprime loans.

In Detroit, which formerly enjoyed the highest rate of African-American homeownership of any U.S. city, $4 billion in subprime loans were written in the four years before the 2008 housing and financial crash. In Detroit, 78 percent of foreclosed homes financed through subprime loans are now in poor condition or tax foreclosed.

All banks and lenders were active participants in the subprime market because the rate of profit on subprime loans when sold to investors was eight times greater than the comparable rate on traditional fixed-rate loans.

Federal government and tax foreclosures

Fannie Mae and Freddie Mac, government corporations operated by the Federal Housing Finance Agency, are listed as the foreclosing entity on 7,700 homes in Detroit, of which 46 percent and 58 percent are respectively blighted or abandoned.

The Federal Housing Authority was listed as the foreclosing entity on 2,453 homes in Detroit, of which half are blighted or abandoned. Fannie Mae, Freddie Mac and the FHA stand behind the banks that actually foreclose on homes, with the government then paying the banks the full value of the inflated mortgage after foreclosure.

McDonald and Kurth’s series demonstrates the relationship between the mortgage foreclosures occurring in 2005 to 2010 and the property tax foreclosures that predominate today. Many of the banks sold homes after foreclosure at prices tens of thousands of dollars below the loan values and thousands of dollars below the values upon which the property taxes were assessed.

The purchasers of the homes, such as investors who purchased blocks of Detroit homes for a very minimal price, never paid the property taxes on these homes. Therefore many homes that originally were subject to mortgage foreclosures are now subject to property tax foreclosures as well. In the meantime, the homes remained vacant and were vandalized, and now are blighted and slated for demolition.

Had the banks worked with homeowners to modify their subprime mortgage loans, or reduced the amounts owed to the true value of the homes, the homeowners and their families would have been able to stay in their homes. The spiral of foreclosures and blight could have been avoided. Rational planning, however, never occurs to finance capital, whose only interest is maximizing profit with complete disregard to the human consequences.

Coalition demands moratorium

The Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shutoffs first raised the demand for a moratorium or halt on all foreclosures and foreclosure-related evictions in 2007, when the crisis was just starting to unfold.

A coalition member got invited to a televised town hall meeting on Michigan’s economic crisis with liberal Democratic Governor Jennifer Granholm. The Moratorium NOW! representative explained to Granholm that under Michigan law she could declare a state of emergency and impose a moratorium to halt all foreclosures.

He told the governor about the 1930s’ Michigan foreclosure moratorium that lasted for five years during the Depression. Foreclosures were banned then and courts were mandated to set payments based on families’ ability to pay. The Michigan moratorium law and similar moratoria in 25 other states were upheld as constitutional by the U.S. Supreme Court.

Gov. Granholm’s response to putting a moratorium on foreclosures: “The banks wouldn’t like it.” A bill calling for a two-year moratorium was then introduced by State Senator Hansen Clarke, but it was stonewalled in the Legislature by Republicans and Democrats alike.

The coalition has stated many times: Had a moratorium on foreclosures been implemented in 2007, 139,000 Detroit homes would have avoided foreclosure, the population would still be close to 1 million, and the homeownership rate in the city would not have plunged from the highest to the lowest in the country. Instead, as McDonald and Kurth point out, Detroit and Michigan political leaders refused to take on the banks in any way, shape or form.

The people’s lost wealth

Kurth and McDonald’s series estimated that the foreclosure epidemic caused by the banks’ predatory lending practices has cost the city of Detroit approximately $500 million, with $195 million to tear down vacant homes and $300 million in lost property tax revenue.

But that is a fraction of the actual cost.

Detroit’s decline in property values cost Detroiters an estimated $1.3 billion in lost personal wealth. When 240,000 residents are driven out of the city and the wealth of the remaining residents is decimated, their income tax dollars and the money they spend on purchases within the city are lost as well.

In addition, the same banks which caused the destruction of Detroit’s neighborhoods then placed the city itself in predatory bond deals, often tied to interest rate swaps. The city lost approximately $1 billion to the banks in these swaps, as has been outlined previously in Workers World.

Today, approximately 20,000 occupied Detroit homes are facing tax foreclosure, with 25,000 other families facing de facto eviction through water shutoffs.

The state, under reactionary Gov. Rick Snyder, is sitting on $200 million in unspent federal Helping Michigan’s Hardest-Hit Homeowners Funds — funding earmarked to help distressed homeowners stay in their homes. Rather than release these funds to pay off delinquent property tax and water bills, this money is being diverted to Detroit’s “blight task force” to tear down homes instead.

The blight task force is run by Dan Gilbert, owner of Quicken Loans, a lender which has been charged by the Justice Department with fraudulent lending in connection with FHA loans and the responsible party for over 500 blighted homes resulting from Quicken Loan foreclosures.

Thus, the banks are being paid to tear down the blight they caused by their predatory lending policies, with funds that are supposed to be dedicated to preserving homeownership.

Take it from the banks, not the people

The Moratorium NOW! Coalition is demanding that there be an immediate moratorium on all tax foreclosures and water shutoffs in Detroit and that the federal Hardest-Hit Homeowners Funds be released and used for their stated purpose — to keep families in their homes by paying off delinquent tax and water bills.

Moratorium NOW! is also demanding the banks pay reparations to the city of Detroit for the destruction they caused, in the form of a $2 billion payment which can be used to implement a jobs program putting young people to work rebuilding homes and neighborhoods throughout the city.

The coalition is asking activists from throughout the U.S. to come to Detroit this fall for a massive demonstration to Stop the Foreclosures, Stop the Water Shutoffs, and Save and Rebuild This African-American City.

For more information, go to, email, or call 313-680-5508.

Print Friendly Version of this pagePrint Get a PDF version of this webpagePDF

Article source:

Tips to help prevent home foreclosure

Programs that homeowners can turn to when needing help to stop or prevent home foreclosures.

Article source:

WSHFC foreclosure help funded

July 2, 2015

WSHFC foreclosure help funded

Washington State Housing Finance Commission received a two-year, $807,788 grant from the state Attorney General’s Office for counseling homeowners facing foreclosure statewide. The goal is to slow down or stop preventable foreclosures. A press release says the funds will be focused on “high-need” areas in Clark, Pierce and Spokane counties. Since 1998, WSHFC has allocated $26.3 million to nonprofits for counseling services. WSHFC said it has created or preserved affordable housing for more than 307,000 people statewide.

Article source:

County land bank nearing house demolitions

Neighbors say it was just last week when police were called out to an abandoned home on Zane Avenue.

“That place has been empty for the last five years,” said Rick Tabler, who lives a few doors down. “People have been breaking into it for years and just last week the police came in and had to move a homeless guy out of there.”

The home, 523 N. Zane Ave., was purchased along with 11 other homes by the Fairfield County land bank, called the Fairfield County Land Reutilization Corp., during sheriff’s sales held last week.

On Tuesday, a crew with North American Environmental Services, of Columbus, inspected each of the homes for the presence of asbestos.

“Now that we own these properties, this is the first step before demolition,” said Michael Kaper, executive director of the Fairfield County LRC.

All 10 of the homes on the Tuesday list were homes that were beyond repair and scheduled for demolition.

“We tried to get into the home at 127 Arney, but it was so full of debris from beer cans and trash that the crew couldn’t get inside to do the inspection,” Kaper said. “We are going to have someone come out and clean out the house before we can find out if there is asbestos in it.”

Kaper said they also purchased two properties that could be rehabilitated, 1040 Sugar Grove Road and 123 Hunter Ave.

Kaper said once the buildings are demolished, they will put the properties up for sale, with the adjacent neighbors getting the first crack at purchasing them.

Mildred Joy, who lives behind the abandoned house on Zane Avenue, said she and her husband have been trying to clean parts of the property that adjoins their property since they moved in.

“There was a lot of trash there, wood and tires,” Joy said. “We tried to pick up the trash and some of the wood we could use in our wood burner. It just had a lot of animals like rats and skunks living in and around there.”

She said people in the neighborhood would be glad to see the property torn down.

Under Ohio Revised Code, land banks are operated as community land reutilization corporations, which are nonprofit corporations.

A blighted property would have to go through the foreclosure process, either by the mortgage holder or the county board of revision.

After that process is complete, the land bank can take the title to the property and sell it at a sheriff’s sale or demolish it. A land bank also can also transfer the deed to a local government. A delinquent property owner could stop the proceedings by paying the back taxes and agreeing to improve the property. Fairfield County’s land bank was created in 2013 and the county commissioners passed a resolution designating an additional 5 percent of delinquent tax collections to go toward the land bank’s use.

Donna Fox-Moore, program coordinator for the Lancaster-Fairfield Community Action Agency, said the land bank’s demolition program, coming on the heels of the Ohio Moving Forward demolition grant program last year, will help clean up eyesores in neighborhoods.

“Under this program, we have about $400,000 for use to deal with a dozen properties by the land bank and another a few hundred thousand more it we can identify a total of 25 properties by September,” Fox-Moore said. “All the work needs to be done by March 30.”

Kaper said that once they know the results of the asbestos testing, demolition could begin as early as three weeks.


Twitter: @CarlBurnettJr

Properties scheduled for demolition by the Fairfield County Land Reutilization Corporation

206 S. Cedar Ave.

146 S. Cedar Ave.

127 Arney Ave.

410 Ogara Ave.

212 Sherman Ave.

136 Sherman Ave.

523 Zane Ave.

861 Champion Ave.

820 Denny Ave.

Article source:

Denver homeowner fighting city’s attempt to acquire historic home through …

DENVER – What was once a gorgeous home sits in disrepair, the roof open to the elements.

The 104-year-old Bosler House at 3209 W. Fairview Place has been that way since 2009.

That’s when the city of Denver told the current owner, Keith Painter, to stop work.

Painter had been granted permits to do some roof and siding work on the historic structure.  The city says the work he was doing exceeded the scope of work authorized by the permits.

“He popped the top,” said Denver Community Planning and Development spokeswoman Andrea Burns. That was a no-no on a house that had been designated a landmark in 1984 — three years before Painter purchased it.

Since then, Painter has been involved in a tiff with the city while the house deteriorates.

The city says it has asked Painter to restore the original roof profile.  He says he can’t do the work the city wants without doing more damage.

“In order to put a new roof on, under the pretense that they want right now, I have to violate Denver code and I’d have to make that unsafe,” he said. “That’s not acceptable.”

When asked why he left the roof open, Painter replied, “I would have loved to close it up, but almost every day, if not once a week, when I was over here trying to fix what I could to get it ready, a person from the city, including police officers, parked out in front of the building or parked right here, and would watch, making sure I didn’t put a tarp on it, making sure I didn’t do any kind of construction whatsoever.”

Painter told 7NEWS that at $90,000, the temporary roof the city wants done would cost more than an arm and a leg.

“Not only an arm and a leg but probably the first born of each of my daughters and probably something else, and that’s not acceptable,” he said.

Concerned neighbors believe Painter is intentionally letting the house deteriorate so it can be demolished and redeveloped.

They started a Facebook page (Save the Bosler House Now) to spur the city into action.

Now the city is attempting to acquire the property through foreclosure.

“Foreclosure is a last resort for us,” said Andrea Burns of the Denver Community Planning and Development office. “We’ve simply run out of options.  We’re going to try to protect the house, if we can, through foreclosure.”

Burns said that if something is not done soon, the house is at risk of becoming a total loss.

She said the city will assess the house to determine what condition it’s in, what needs to be repaired and how much it might cost.

She said a draft assessment is expected in August and a final assessment in October.

When asked if tax money will be used to repair the property, Burns said, “The city is paying for basic maintenance that’s being done now — grading and fencing.  We hope to recoup these costs through foreclosure or sale.”

In terms of major repairs, Burns said, “We hope that those will be done by a future owner.”

Painter told 7NEWS that his property rights are being ignored.

“I should be compensated,” he said.

He said the city should have assessed the property in 1984 (when it was designated a landmark) and determined the scope of work that was needed to repair and maintain the property.

Burns said the city has 331 “Landmark” properties and this is the only one with this issue.

Painter and his family look forward to his day in court.

“It’s very taxing emotionally,” said his daughter, Maura.  “It would have been very, very nice to have continued living there.”

She said their current house is much smaller and that her dad sleeps in the living room.

“He sacrificed for us,” Maura said.

Painter questions why the Landmark Commission, Historic Denver or other preservation groups don’t offer to help.

“When there’s a flood or famine, we immediately send money. We immediately send people. We have great religious organizations doing this.  Why isn’t Historic Denver helping property owners like me?”

Burns said the city has tried working with Painter for six years but has gotten nowhere.

“If you’re going to buy a historic structure, you should be aware that there is a higher bar for preservation and maintenance of that property,” she said.

Timeline of Events

  • The Bosler House was constructed in 1875 and was designated as a local historic landmark for preservation by the Denver Landmark Preservation Commission in 1984.
  • In 1984, the Bosler House was placed on the Naitonal Register of Historic Places.
  • On September 11, 2008, Defendant applied for and was granted a construction permit and roofing and siding permit from the city.  Four months later, the city issued a stop work order because work exceeded scope authorized by permits.
  • On February 2, 2009, Defendant submitted a Design Review Application as a result of the stop work order.
  • On February 17, 2009, the Landmark Preservation Commission held a hearing on the Design Review Application and voted unanimously to retain the original structure of the roof to its pre-alteration form.
  • In April 2010, Painter filed an application to fully demolish the house.  That application was rejected.
  • The city then filed a complaint in Denver District Court seeking to inspect and perform various repairs and maintenance to the Bosler House.  The request was granted by the court.
  • On December 6, 2010, Painter submitted an Application to demonstrate Economic Hardship to allow for demolition of the historic house.  The city’s Landmark Preservation Commission unanimously voted to deny the application.
  • In January 2011, Painter filed a complaint seeking judicial review of the Commission’s design review hearing.
  • In November of that year, his claims were either dismissed, due to the statute of limitations, or denied because the court found competent evidence to support the Commission’s decision.
  • Court granted the City’s injunction and authorized the City to utilize a contractor to dry in the roof of the Bosler House.  Defendant also ordered to comply with the 2009 order that the original roof profile of the Bosler House be retained to protect the historic character of the structure.
  • City lacked sufficient resources to perform the dry-in work, and the Defendant never complied with the court order to retain the original roof profile.  The structure has remained open to the elements.
  • On May 9, 2013, the City issued a notice of violation to Mr. Painter, citing the Bosler House as a vacant and boarded structure, and as a historic structure not maintained in accordance with the Denver Revised Municipal Code – Chapter 30.
  • The NOV ordered Mr. Painter to submit a remedial plan.  His plan proposed demolishing the structure.
  • The city rejected the remedial plan and set a “show cause” hearing for Dec. 5, 2013.  Mr. Painter failed to appear.
  • On Dec. 10, 2013, the administrative hearing officer issued an order upholding the NOV and assessment of $16,650 in fees and imposing civil penalties of $999/day retroactive to the May 9, 2013 Notice of Violation.
  • Pursuant to the order, the civil penalties continue to accrue until the property is brought into compliance or the penalties reach 110 percent of the property value.  Principal value of the civil penalties, fees and administrative citations that are liens against the Bosler House is $560,106.

Article source:

Ask an Attorney: Can my HOA foreclose?

Sunday, June 28, 2015 | 2 a.m.

By Attorney Xenophon Peters, Partner, Peters and Associates, LLP

Question: Last week, I got a letter saying my HOA was foreclosing on my home because I owe them $2,000 that’s past due. Can they do that? I’m current on my mortgage and don’t think I owe them money!

Answer: Yes. In Nevada, a homeowners association has the right to foreclose on a home regardless of whether you’re current on your mortgage, even if you dispute the amount you owe. In fact, your letter probably reads, “Warning! If you fail to pay the amount specified in this notice, you could lose your home, even if the amount is in dispute.” (That’s required by law).

HOA foreclosure has been in the news a lot over the past few years, most recently when Gov. Brian Sandoval signed into law Senate Bill 306, which adds several new rules governing HOA foreclosure. Unfortunately for the reader who asked today’s question, the bill doesn’t take effect until Oct. 1.

HOA foreclosure is no joking matter. Once the process has started, HOAs tend to foreclose quickly, leaving many (former) homeowners upset and confused when they’re evicted by new owners. Adding to the misery, as of this writing, most HOA foreclosures are permanent, meaning there’s no right of redemption.*

Hope is not lost, though. It’s usually possible to negotiate with your HOA to stop the sale and work out a payment plan — sometimes for less than what you owe. The truth is, most HOAs don’t want to foreclose on residents, they just want to get paid. (They’re about as strapped for cash as the rest of us). If you communicate with your HOA board, you usually can work something out.

If your HOA board won’t work with you, there may be other options available to stop or delay an HOA foreclosure, including bankruptcy and filing a lawsuit. Before going down those paths, however, I encourage you to try to handle the situation outside of the court system.

*When Senate Bill 306 goes into effect in October, homeowners will have 60 days after the date of foreclosure to pay the auction-sales price plus other expenses as noted in NRS 116.31166 to get their home back.

If you have a question you’d like to see answered by an attorney in a future issue, please visit

Please note: The information in this column is intended for general purposes only and is not to be considered legal or professional advice of any kind. You should seek advice that is specific to your problem before taking or refraining from any action and should not rely on the information in this column.

Article source:

Foreclosure Lawyers That Stop Foreclosure Sales

Foreclosure lawyers at Consumer Action Law Group offers legal solutions to stop the foreclosure process. They have offered many methods to California homeowners on how to stop a foreclosure.

This press release was orginally distributed by ReleaseWire

Los Angeles, CA — (ReleaseWire) — 06/25/2015 — There are still many homeowners in the States of California that are facing foreclosure. Whether these homeowners are in the early stage of foreclosure or have already received a notice of default or notice of sale, there is hope for those who want to stop the foreclosure process and save the home. When receiving a notice of default or notice of trustee sale, homeowners have the best chance of saving their home when they contact foreclosure lawyers for assistance to stop the foreclosure process. In most cases, foreclosure attorneys can help homeowners to stop foreclosure and save their property.

An experienced foreclosure lawyer can offer many options to assist a home owner in distress. Foreclosure attorneys offer legal solutions to stop the foreclosure process. There are many methods available to California homeowners to stop foreclosure:

1. Filing a lawsuit: This is a very effective way to stop foreclosure. Many people avoid filing a lawsuit because they think that their lender help them. In fact, filing a lawsuit is a wise choice when the lender promises to help and simultaneously moves forward with the foreclosure process [a common practice called dual tracking – which is illegal]. A strong foreclosure lawyer can fight to negotiate for the borrower’s rights. If the homeowner files a lawsuit, they can usually remain in their property. If the lender violates the right of the borrower or commits fraud, a foreclosure attorney can defend the borrower in the court.

2. Getting a temporary restraining order: After filing a lawsuit, many homeowners are entitled to a temporary restraining order from the court. To obtain a temporary restraining order, homeowners have to convince the judge about the effect of “irreparable harm” if the foreclosure continues. The lenders will be ordered to stop the sale if the judge grants the temporary restraining order.

3. Filing a lis pendens: Lis a pendens means that a pending lawsuit can affect the title of the property in dispute. So, a new buyer of the property will also become aware of the lawsuit and the property dispute while the lawsuit is proceeding.

4. Filing for bankruptcy: This option is usually the last resort after all options are exhausted. Bankruptcy immediately stops the foreclosure and makes it possible for the homeowner to keep the property. There are additional benefits for filing bankruptcy such as discharge from debts and stopping all collections. When filing bankruptcy to stop a foreclosure, homeowners are strongly advised to get experienced legal counsel such as foreclosure attorneys to help decide whether they should file for chapter 7 or 13 bankruptcy.

For the best solutions and experienced legal assistance, the foreclosure lawyer at Consumer Action Law Group help homeowners to stop foreclosure through the courts.

For detailed information about their service, visit or Call 818-254-8413.

About Consumer Action Law Group
Consumer Action Law Group is a law firm dedicated to help consumers in consumer-related matters or consumers that experienced fraud and scam. Attorneys in the team are knowledgeable and experienced in the areas of eliminating debt, mortgages fraud, auto fraud, and foreclosures. They have direct experience in consumer fraud matters and helping consumers who are facing financial crisis, foreclosure, issues with employers, and problems with auto dealers.

For Media Contact:
Contact Person: Lauren Rode, Esq.
Telephone: 818-254-8413

For more information on this press release visit:

Article source:

Foreclosures leave a wake of drugs, squatters, arson

Detroit — One of the better houses on the block has a warning spray-painted on the plywood door: “Don’t Get Shot.”

A few doors down, two homes are freshly burned. Up the block are the demolished remains of three drug houses. On the sidewalk are empty crack cocaine baggies.

This is Greensboro Street after the foreclosure bomb. Ten years ago, it was home to aspirational working-class families in sturdy brick homes. Today, the block is the sort of place where a preacher, the Rev. Raynard Sims, answers his door with a Glock holstered to his pajamas.

“I walk around strapped. I have to,” said Sims, 49, a 30-year resident of the street on Detroit’s east side near Outer Drive and Harper.

“When you have to decide which Kroger bags you can leave overnight in the car because you have to leave one hand open to hold your gun as you rush inside, that’s when you know: The neighborhood you knew is gone.”


The street is an extreme example of the hell that subprime loans and foreclosures have wrought on Detroit. Lenders offered easy money through home equity loans and refinances. Residents signed on the dotted line.

Now, all but five of 38 homes on a stretch of Greensboro have gone into mortgage or tax foreclosure since 2006. That’s more than double the citywide average of 1-in-3, but its story of loss — personal, financial, physical and social — resonates throughout Detroit.

That’s because foreclosure is a bomb with multiple detonations. The first comes when homes are abandoned. Then they are neglected, stripped of metals, left open for squatters and drug dealers. When nothing is left, they often burn.

In the last five years, the police conducted multiple drug raids of homes on Greensboro from Wade to just beyond Elmdale. Four homes have burned. Four were demolished last year at a cost of $15,000 apiece.

Eighteen former homeowners on Greensboro declared bankruptcy since 2006, federal records show. At least 11 families who moved from the block no longer live in Detroit.

“It was insane. Everything went just like that. I could cry just thinking about it,” said Quaneda Real, who now lives in Highland Park.

She filed for bankruptcy, slept in a car for a week and moved into a house with no heat or water after losing her home on Greensboro.

Real owed $120,000 to now-insolvent Shore Bank. In 2010, the bank sold the home for $3,000 to Kelli Davis.

The home was empty less than a year. During that time, it was set on fire. Vandals stole pipes, the furnace and toilet. When Davis opened the door of the brick bungalow for the first time, more than a dozen pit bull puppies walked out.

Someone had left hay and adult dogs inside the home, presumably to protect it. The dogs bred, said Davis.

“I bleached the floor four times. There was (poop) everywhere,” said Davis, who went through with the sale because the price was right.

Down the street, Anthony Hannaford sat on his stoop one morning, pointing at empty houses and piles of rubble and rattling off what went wrong.

That landlord stopped paying his taxes. … That house was foreclosed after its owner went off to war in Iraq and died. … A woman OD’d in that drug house. … Squatters live across the street.

“We try to clean up the yards (of the abandoned homes) as much as we can, but the city doesn’t come out here at all,” said Hannaford, 44, who has lived on Greensboro all his life.

“But some of these houses, we just let them go. I don’t want anyone breaking my windows for calling the police if they’re stripping.”

Ravaged by the subprime mortgage meltdown, owners of 33 of 38 homes went into foreclosure. Home values dropped, balloon interest payments rose, and many had no choice but to walk away.
Clarence Tabb Jr., The Detroit News

It wasn’t always this way. In 1985, still in his teens, Sims scraped together enough money for a down payment on a $24,000 house at 9425 Greensboro. He was the fourth African-American on the block. Hannaford, who is white, had been there with his parents for 15 years.

The neighborhood, part of the David Trombly’s Harper Avenue subdivision, emerged in the late 1920s and early 1930s. Homes were built on lots close together and buffered by wide alleys.

They were solid houses for families who worked at nearby auto plants: 900 to 1,500 square feet. Two or three bedrooms. Few frills, but sturdy and meant to last. In 2010, median family income in the neighborhood was $45,000 and the poverty rate was 36 percent, both slightly better than average for Detroit, according to the U.S. Census.

“We used to compete to see who could grow the prettiest flowers,” said Sims, pastor of the Unity and Faith Christian Church in Highland Park.

“It was a neighborhood. And my definition of neighborhood is people sharing and looking out for each other.”

In 1989, Gwen Mangrum joined the firefighters, teachers and factory workers who lived on the block. She was a single mother who works as an auditor for the state of Michigan. Every night, she would walk or ride her bicycle up and down the block.

“It was so nice. It really was,” said Mangrum, 53.

Mortgage companies thought it was nice, too. Their agents came calling.

Mangrum’s 900-square-foot home was paid off by 2001, but she took out a $25,000 home equity loan to pay for a new roof, windows and insulation.

“It was a big explosion,” she said. “Everyone I knew was like, ‘You need to re-fi. You are sitting on money if you don’t.’ “

Sims likened the greed of the time to a “trick bag,” a trap from which it’s difficult to escape.

In 2004, after months of seeing TV ads about home refinancing, Sims called Household Finance Corp. Within weeks, an appraiser working with the company told him his home was worth $101,000, five times what he paid for it.

“Man, those guys were good,” Sims said. “They come to your home, they say ‘You want some money? Show us your bills.’ Then they come back six months later and say ‘You want some more?’ They were our friend until the bottom fell out.”

Sims took a home equity line of credit for $25,000. He brought in his bills to the closing. The lender paid them: an $8,200 car loan, $3,600 to a jeweler and $4,000 to credit card companies. He left the meeting with a personal check for $7,700.

By then, Mangrum had married. It wasn’t going well. Spending money was better than arguing, Mangrum acknowledged.

She refinanced again, paying off a van and pushing her debt to $50,000.

“They kept offering and offering money. It was like ‘come here, try this.’ They even suggested ways to spend the money,” Mangrum said.

In October 2006, Lamar Calloway bought his first house. His credit score was less than 500. Even so, Wells Fargo gave him a mortgage for $104,000 for a five-bedroom, 1,500-square-foot brick bungalow catty-corner from Sims.

“I was shocked I got approved,” said Calloway, a truck driver for Eastern Market. “When we walked into the house for the first time, it was like, ‘Wow. We finally made it.’ “

Nothing was as Calloway expected when he and his family moved in. Not the home. Not Greensboro.

Pipes in one bedroom were missing. Carpet covered a broken floor. Fresh paint masked mold in the bathroom. The living room chandelier was strung with wires from a stereo speaker.

“We were so excited to get a house, we just rushed in,” Calloway said. “We were so blind.”

Within one year, Calloway’s monthly mortgage payment doubled to $1,200 from $642. He picked up extra shifts, working 80-hour, six-day weeks. He missed birthday parties and graduations for his two children.

It wasn’t enough. He filed for bankruptcy in 2009 in an effort to suspend foreclosure proceedings while debts were refinanced.

“I busted my butt to keep that house,” he said. “My wife didn’t know what was going on. I was too embarrassed to tell her. We’ve been together 25 years, but that house almost made us fall apart.”

The couple arrived during the early wave of foreclosures and left as the neighborhood was decimated. In the year before they moved to Greensboro, two homes went into foreclosure. In the next 15 months, the number grew to 13. By 2012, when they had decided to leave, 33 homes had been foreclosed.

Foreclosure notices by law are posted on homes. They were so common on Greensboro they had become a running joke, said Sims, the pastor.

“Every day, it was like, ‘Man, you got a letter, too?’ ” he said. “We were smiling on the outside but crying on the inside. All you (had) worked for was gone.”

Sims’ first notice came in fall 2008. His initial $25,000 home equity loan soared to $104,000 because he refinanced again, bundling it with another mortgage on a rental property. The loan was sold multiple times and the interest rate ballooned to 13.99 percent.

Sims was late on a payment by more than 60 days. That put his loan into default, a condition in which the bank can foreclose unless the entire balance is paid. Sims paid $5,000 in hopes of getting out of default. Wells Fargo foreclosed after he missed more payments.

Mangrum made it to 2012. That was a few years after she moved out as her marriage dissolved. She allowed her ex-husband to stay in the home in hopes of making the 2009 divorce easier. He was supposed to pay the mortgage, but her name stayed on it.

In 11 years, Mangrum went from owning the home outright to owing $75,000 to LaSalle Bank Midwest.

“Foreclosure is nothing I ever anticipated. It’s depressing and sad,” said Mangrum, who now lives in an east side rental and plans to move from Detroit for good once she retires from the state.

Her home was one of 23 on the block that banks foreclosed in the past 10 years. Another 10 were foreclosed for nonpayment of taxes.

Seemingly overnight, “everything went to hell,” said Sims.

Squatters occupied Mangrum’s house and several others on the street. Men in vans pulled up to empty homes and removed furnaces and appliances. It was tough to know if they worked for the mortgage companies or were criminals, Sims said.

Drug dealers took over three homes in the middle of the block that went into foreclosure, Calloway said. Confused customers would knock on his door at all hours looking for drugs, he said.

Police raided the vacant homes in 2011, 2012 and 2013, city records show.

“The drug dealers moved in and destroyed a lot of (the homes),” said Detroit Police Lt. Chuck Flanagan, the former head of the department’s Narcotics Section.

“We knew about the drug activity and raided those places several times. Because they’re vacant homes, you don’t need a search warrant, so we were able to make a lot of arrests.”

In 2012, Calloway gave up. He abandoned his bankruptcy case, left and allowed the home to slip into foreclosure.

The breaking point: Rushing through shopping on Christmas Eve because he feared the home would be burglarized if it was empty for several hours. His boss helped the family move into a rental home in Roseville.

“It was just too many worries. Too much chaos,” Calloway said.

Sims filed for bankruptcy in 2009 and outlasted multiple foreclosure notices that began arriving in 2008.

The bankruptcy gave him time for his luck to turn. In 2011, after he emerged from bankruptcy, Wells Fargo deeded the house to him. The same year, his longtime neighbor moved to Hawaii.

It was easier to give away than to sell, so the owner deeded him the house next door. He maintains both, mows lawns of vacant homes and still plants flowers.

“It’s called pride,” he said.

And then, just after the neighborhood hit bottom, calm returned to Greensboro.

Sims’ goddaughter, Kelli Davis, has spent four years making improvements on the house she bought for $3,000 across the street from him. It was stripped completely when she moved in. She’s spent $25,000 on remodeling, including a security system and bars on both sides of the windows after three break-ins.

She and other neighbors boarded open homes and spray-painted “Don’t Get Shot” and “Booby Trapped” on doors to scare off squatters.

“It’s quiet since no one is on the block,” said Davis, who works nearby at a Fiat Chrysler plant.

All but 12 houses are now vacant. At least three foreclosed homes are being renovated, while private investment companies have bought eight others. Another foreclosed home, though, has been overrun by drug dealers and squatters this summer, Sims said.

“Things will turn around eventually,” said Keith Williams, a disabled factory worker.

He bought Mangrum’s foreclosed home from the bank in 2012 for $1,100. During the three years it was vacant, thieves gutted the building.

Williams is picking away at repairs, racking up $10,000 on credit cards. He boarded the back door, secured it with three padlocks and two 10-inch bolts nailed into the house. Burglars still have gotten in, so he removed the door knobs inside to slow them down.

“If you’re going to steal from me, I at least want you to earn it,” Williams said.

In October, the house next door went into foreclosure. Williams boarded the windows and secured the doors with 5-inch screws.

It wasn’t enough. Thieves first stole the furnace and hot water heater. The week before Thanksgiving, the front door was kicked in and the refrigerator, stove, kitchen table, glass shelves and a mattress and box spring were stolen.

“Why would anyone steal a used mattress?” Williams asked, as he walked through the ransacked house. “I can’t watch it every day. It’s not my property. I have my own problems.”

He’s among those bracing for another foreclosure storm. His tax bill climbed to $2,100, twice what he paid for the home. Another 27 homes on the street are delinquent on taxes. Property records show 15 are eligible for foreclosure this year.

In December, Williams gave Mangrum a tour of her old house. It was the second time back since she moved out. The first time, she was greeted by squatters who had knocked down the back door, ate in her kitchen and collected her mail.

Williams cataloged all his repairs. Mangrum remembered the good times, how she used to lay on pillows next to the fireplace and stare up at the plaster ceiling.

The ceiling collapsed when Williams bought the house. Thieves had stolen shingles from the roof, the last big purchase on Mangrum’s home equity line of credit that drove her into foreclosure.

“I am so sorry you had to do all this,” Mangrum told Williams. “It’s terrible. This neighborhood didn’t need to end up like this. It really didn’t.”

  • More than 1-in-3 homes have been foreclosed in 10 years in Detroit, the equivalent of every house in Buffalo.

  • Subprime lending was rampant in Detroit and areas with the most high-cost lending are the most blighted.

  • Foreclosures hit Detroit harder than almost any city, but Detroit officials did little to hold lenders accountable. | Twitter: @cityhallinsider, (313) 222-2396

Article source:

Meet the Man Who Is Lending to the Recently Foreclosed On and Bankrupt


As more small lenders begin giving mortgages to people with troubled credit histories , one lender in particular stands out for his controversial background.

Jon Maddux, president of Encinitas, Calif.-based Drop Mortgage, a mortgage lender that launched last year and mostly works with such borrowers, has a long history in the mortgage market, including helping borrowers to walk away from their homes during the housing crisis. Mr. Maddux co-founded in 2008, which offered advice to homeowners who were having a difficult time keeping up with their mortgage payments or whose mortgage amounts exceeded the value of their home. The firm became popular during the downturn for its role in assisting homeowners who defaulted on their mortgages and were considering leaving their houses.

As the housing crisis eased, Mr. Maddux shifted gears and in 2012 co-founded, which focuses on helping former homeowners who went through a foreclosure to get back into the housing market. The website asks them a series of questions to figure out if they are eligible for a mortgage and it sells leads to lenders who contact former homeowners informing them of their mortgage options. They include mortgages insured by the Federal Housing Administration, which has low credit score requirements and can have relatively short waiting periods following foreclosure. Another option offered are loans that these lenders are holding on their books or selling to private investors.

That’s the space Mr. Maddux entered last summer when he co-founded Drop Mortgage. One way it finds potential borrowers is by searching the databases from YouWalkAway and AfterForeclosure, Mr. Maddux says, which collectively have more than 58,000 names. Drop Mortgage informs these borrowers that they could qualify for mortgages sooner than many of them think, effectively offering them a second chance at becoming homeowners again.

Mr. Maddux stands by his track record. He says YouWalkAway gave advice to homeowners who decided to stop making payments and that it never advised them to default. “Our main focus was to educate homeowner[s] of their rights,” he says. “The experience I got from running YouWalkAway…really helped me get ahead of any competition.”

Article source:

Black Americans won’t stop being poorer unless banks stop discriminating

The American Civil Liberties Union (ACLU) issued a report this month that reveals stark disparities in the amount of wealth American households recovered after the 2007-2009 recession, with white-owned homes and assets recovering more fully than black-owned ones.

These findings, including that pre-recession predatory lending that disproportionately targeted minorities continues to hurt black households more, comes as the US supreme court decided Thursday that certain housing practices that harm minorities are illegal under the Fair Housing Act.

The ACLU report, which covers the timeframe that includes the recession and the economic recovery (2009-2011), finds that average black household wealth dropped 33%, while white household wealth declined by only 12% during that four-year period. An earlier study similarly found that white household wealth dropped 16% between 2005 and 2009, while black household wealth declined by 52%.

It relied on a dataset which shows that white household non-housing wealth, like retirement accounts and savings, started to increase during the recovery period even though white household housing wealth did not return to pre-recession levels. Overall white household wealth stopped declining during the recovery period despite a sluggish housing market. While white household wealth stabilized, black households lost an additional 13% of their wealth during that period.

Blacks have always been at greater risk for losing wealth during housing market declines, because home equity comprises a much larger percentage of their overall wealth. The ACLU report notes that housing equity makes up 51% of white household wealth, but 71% of wealth for black households.

Black neighborhoods had higher foreclosure rates between 2007 and 2011 because black borrowers were disproportionately steered to higher-cost and higher-risk loans during the housing boom. Higher home-buying costs reduced black household wealth and also increased the likelihood that the black borrowers would default on their mortgage loans. Especially in light of Thursday’s supreme court ruling, the government must continue to monitor banks’ lending practices and must carefully evaluate any attempt to relax lending standards to help boost home sales.

And individually, black households can help close the racial wealth gap by diversifying their assets and investing in stocks and amassing other non-housing assets.

Even if blacks diversify their assets, though, the racial wealth gap will not close as long as homes in black neighborhoods continue to be valued less than comparable homes in white neighborhoods.

Home values in black, Latino and low-income neighborhoods have not recovered from the recession, but home prices in wealthier, white areas are now on the rise. One reason home values in black neighborhoods remain low is because of the disparate ways banks manage and maintain real estate owned (REO) homes they acquire in foreclosure sales.

A 2014 report found that REO homes in black neighborhoods are more than twice as likely to have overgrown yards littered with trash or to have broken or boarded windows compared to REO homes in white neighborhoods. White homes are marketed more heavily than homes in black neighborhoods, likely because they are better maintained.

Because homes located near poorly kept and vacant homes depreciate in value, the racial wealth gap will continue to expand if lenders continue to engage in discrimination against black neighborhoods. Fortunately, some members of Congress just called for regulators to investigate these practices.

Black families must help themselves by avoiding predatory lending and making sure their money is invested wisely. But as the high court reiterated today, the government must ensure an end to the housing discrimination that helped forge this stark wealth discrepancy.

Article source: