Adjustable-rate mortgage meant for repairs costs woman her house
Lisa Roberson
COLUMBIA TWP. — Evelyn Hunt sits quietly at her kitchen table, a newspaper spread out in front of her and a cup of coffee at hand.
It’s when she sits here — where she can glance up and see the cabinets that she helped her former husband hang and the pale yellow walls that she painted that are nearly covered up with the trinkets she’s collected — that she starts reflecting, thinking about her home and her life.
Because the two are so intertwined, she cannot think of one without the other.
An orphan who spent the first 15 years of her life being shuffled from one foster home to the next, Hunt, 73, said she still has vivid memories of a not-so happy childhood.
“You see, this is the only home I’ve ever had,” she said, her voice cracking as she fights back tears. “I love this house. I told my husband I would live in it until the day I die. I can’t lose my house. I can’t believe I got myself in this mess. I can’t believe I … ”
Hunt’s voice faded as she spoke last week about the pending foreclosure and sheriff’s sale that will befall her home of 38 years in the coming months.
After defaulting on an adjustable rate second mortgage, the grandmother of 10 and great-grandmother of four now faces eviction.
A growing trend
Hunt’s home, if sold, will be one in a long string of Lorain County homes to end up on the market because of foreclosure.
“It has been so steady for the past few years that we are only concentrating now on keeping up with the flow,” said sheriff’s Lt. William Davis, head of the civil division, which handles sheriff’s sales.
So far this year, 1,927 homes have gone up for sale, Davis said. The number is on track to exceed the 1,992 homes in 2007 and already tops the 1,647 homes in 2006.
A sheriff’s sale is the end of the road for foreclosure victims.
However, as the country’s elected leaders spent last week discussing and finally approving the controversial economic recovery plan that will essentially hand Wall Street and financial institutions $700 billion of taxpayer money, people like Hunt wonder what the plan will be to help folks like her.
“I don’t know why they aren’t giving it to some of these people who are getting put out of their homes,” Hunt said. “I paid my taxes and did the best I could to do the right thing. I need some help, too.”
Cries like Hunt’s have become common in recent weeks. If the bailout plan is on one end of the spectrum when talking about the country’s economic crisis, foreclosure and bad loans are on the other.
“That’s because everyone can now see that this thing started with the banks, investors, federal government and Securities and Exchange Commission,” said Cathleen Groenstein, spokeswoman for Empowering and Strengthening Ohio’s People (ESOP), a Cleveland-based foreclosure prevention and homeowner advocacy group.
“Brokers were encouraged to sell adjustable rate mortgages because they made money. To do this, they attracted people with lower — teaser — interest rates and told homeowners that before their ARMs changed, they could refinance the loan. However, to the contrary, those loans could not be refinanced, and now loans backers have found themselves in quite a jam. I call it the ultimate free market gone awry.”
Stories like that are common, said Sherry Tulks, foreclosure prevention advocate working in Lorain for ESOP. She cites the example of a 74-year-old woman who used to share her home with her 94-year-old mother. But when the older woman went into a nursing home — taking her Social Security check with her and leaving the younger woman alone to make payments on a $207,000 loan — the woman lost the house.
“The hardest part for me, and what is very frustrating for me, is when I see senior citizens in this (situation),” Tulks said. “It’s disheartening, especially when you go to a sheriff’s sale. You sit there and listen to how 50 or so homes are being sold. It’s very sobering to know each home represents a family or person.”
Tulks said she knows a lot of people want to blame the homeowner for being ignorant of the process. But after looking over hundreds of loan documents as part of her work, she said she can honestly say that more people than not were taken advantage of.
“The biggest problem is lenders that preyed on the elderly,” she said. “They got sucked into loans thinking it’s the best thing for them, and they don’t know what to do.”
Home, at last
Moving into the modest home more than three decades ago changed Hunt’s outlook on life in more ways than she freely talks about with others.
Memories of her childhood are one unpleasant story after another. Telling just one illustrates the horror she lived for years, she said.
“I was 8 years old when I moved in with my worst foster parents,” she said. “They wanted a servant, not a child, and used a razor strap to beat me every time a chore was not done to satisfaction. I would cry myself to sleep with the family dog — my only friend in the house — licking my wounds.”
Moments like that shaped her life for years until — at age 15 — she gathered her belongings and ran away. She got a job working in a “greasy spoon” restaurant and used her meager wages to rent a room in a rundown motel.
The daily grind of surviving became her life until Hunt, then 19, met and fell in love with Roy Hunt Jr., whom she married in 1954.
They had four daughters but didn’t have the one thing Hunt said she always craved: a home of her own.
That is until, unbeknownst to her, her husband came up with a plan to buy his bride a home. He decided that the city of Lorain was where he wanted to raise his family, so in 1970, while Hunt and their daughters were visiting her brother in Indiana, Hunt went to look at a small, two-bedroom, ranch-style home that a buddy had told him about.
Hunt said he telephoned her that night saying he was coming to get her because she had papers to sign so they could buy the house.
And that’s how things stayed, even after she and her husband divorced.
The home was eventually paid off in the late 1990s, but in 2004, Hunt decided to take out a second mortgage.
She needed some money for bills, but she mostly wanted to pour everything into home improvements.
“We did the floors, new windows, new doors, a new bathroom and all kinds of stuff,” Hunt said. “I had my Social Security, and I was making good money watching kids in my home, so I could make the payments on the loan. I just wanted to have a nice home to live in until I died.”
In hindsight, she admits she was not as financially literate as she should have been when she signed the loan.
Her loans papers, included as evidence in her foreclosure lawsuit, spell out what type of loan Hunt received.
The words “adjustable rate” are boldly written at the top of the promissory note for the $87,000 loan. Payments of $610.17 began Aug. 1, 2004, and continued at that level until July 1, 2006, when the rate jumped 3 percentage points and changed her payment accordingly. Subsequent rate changes took place every six months thereafter at a rate of 1 percentage point per change until the interest rate topped out at 13.4 percent.
Hunt’s $610 initial payments eventually ballooned to close to $1,000. At the same time, Hunt, who suffers from diabetes, high blood pressure and heart disease, became so ill that doctors advised her to give up baby-sitting, leaving her to survive solely on her Social Security check of $1,058 per month.
“Even then, I kept paying the best I could,” she said. “I would pay the mortgage one month and not pay the utilities. It seemed like the mortgage was going up a little every month. I called the bank, but they said take out another loan. I couldn’t believe it. Before they raised my payments so high, I was right on the dot. They got their money every month.”
However, when talking about the specifics of the loan on Thursday, Hunt said she didn’t know the details spelled out in the fine print translated to higher payments for her.
The promise of low introductory payments and teaser rates made the subprime loans too attractive for some people to pass up, Groenstein said.
“We initially saw that type of lending a lot in the inner city,” said Groenstein, of Empowering and Strengthening Ohio’s People. “A lot of people got drawn in with that teaser rate. But now it’s gone beyond the inner city. It’s gone beyond subprime. It’s in rural areas, and it’s our grandmothers and grandfathers who are losing their homes.”
And when it comes to the elderly, a low rate is attractive because they typically have limited funds.
“However, if they don’t have the know-how to read and understand everything that is put before them, they are really at the mercy of the lender or the broker,” Groenstein said.
An uncertain future
The home Hunt could lose also is the home of her grandson, Marcus Hunt, a full-time college student.
“I brought Marcus to this house when he was 3 days old, right from the hospital,” Hunt said. “My daughter couldn’t raise him, and they wanted to put him in foster care. I couldn’t let that happen. I know what kind of life he would have had.”
At the time, Hunt said she was working a retail job. Not rich by any standard, Hunt said she took on the responsibility of her grandson with no hesitation and vowed to do whatever it took to keep a roof over his head.
“I managed with credit cards and accumulated a lot of debt in the process,” she said. “I messed up my credit, but I made it this far. I’ve got my boy raised and I kept a roof over his head.”
Watching his grandmother fight so hard for her home makes Marcus, 20, wish there was something he could do. Buying the house himself isn’t an option because he works only part-time at Marc’s in North Ridgeville while going to college.
“She told me how hard it was to pay the higher house payments, but she never told me they were going to sell our house,” he said. “I figure she was just trying to keep me from worrying.”
Her only prayer these days as she scours apartment listings is for someone to buy her house and let her rent it from them until she dies.
“I’m a nervous wreck,” she said. “I don’t sleep at night. I look at this paper every night for apartments, but I know I can’t afford it. When this thing first started, I called everybody, and it seemed that no one could help me. Bailing out me was not anyone’s plan.’’
Contact Lisa Roberson at 329-7121 or lroberson@chroniclet.com.
|
| ||
 |
Filed by Lisa Roberson October 5th, 2008 in BREAKING, Top Stories.
|
 Print this story
Read comments and discuss this story
Report an innappropriate comment
|
In order to comment, you must agree to our user agreement
and discussion guidelines.
You must be registered and logged in to post a comment. If you aren't already registered, click here. If you are registered, click here to log in.
I’m sorry for these people, but the only thing I didn’t see in this article is “I’m sorry, I screwed up by wanting something that I couldn’t afford, so I got it anyway”. This society is built on instant gratification. If I screw up bail me out. Rule of thumb, “if you can’t pay for it today, you won’t have the money to pay for it tomorrow”. Responsibility folks! Yes, the banks and mortgage companies were greedy, but so were you. A 74 and 90 year old thought that they could afford $207,000 of debt on Social Security? A woman living on Social Security and babysitting thought that she could afford $87,000 to fix up her house? I am living on Social Security and I know I can’t afford those kind of payments so I do without. It is NOT the responsibility of the government (taxpayers) to bail you out. I hope people are learning a lesson from this, but I doubt it.
(Report comment)
Its unfortunate that the media paints the bad guy in these scenarios as the homeowner and never the banks. It isn’t about a home they couldn’t afford that is a lie you are repeating. It’s about an adjustable mortgage that has a payment that rises four times what it originally was. Nobody could afford a payment four times higher than its introductory amount.
If your loan starts at $600, and ends up at $2,400 a month, a person’s income would also have to rise that much. The banks sold people these loans knowing they would rise to levels the homeowner could not afford. It isn’t about people biting off more than they could chew its about banks with incredible greed selling loans with ridiculously high interest rates that even people with good credit couldn’t still afford.
So quick to judge when you haven’t a clue on what really happened. By the end of this year 8 millions homes will have been foreclosed on in the US. My bets are on the banks that one in 3 people got sold bad loans and not that one in 3 tried to buy a bigger home than they could afford. There are just too many affected. And our politicians response give them $800,000,000,000,000 so they don’t take any losses.
The banks run our country, it couldn’t be more obvious and they control the media as is evidenced by the comment above. No clue…
(Report comment)
My comment was taken from facts in the article. Her home was paid off in the 1990’s and she needed money to pay bills and decided to make home improvements by getting a second mortgage on her home. If she couldn’t pay bills why did she think that she could afford home improvements? My point is, some people lose their homes through no fault of their own, job loss, crisis in the family, ect. Some people lose their home because they want things that they cannot afford. The government does the same thing. They promise things that they can’t afford. The bail out is an outrage, I for one am totally against it but we are in the spot where we have no choice. It is sad for everyone. We need to get back to the basics.
(Report comment)
Partial blame to the homeowner, who should have used a fixed rate mortgage. Adjustable only means one thing and I can’t blame the banks / mortgage firms for end user irresponsibility.
(Report comment)
Maybe the community will come together to save her house?
Oh, wait.. been there, done that.
(Report comment)
At the time, she probably COULD afford it. I know I could afford my mortgage 2 years ago, then my job was outsourced to China.
(Report comment)
I find it hilarious that so many of you can judge others. Especially judging older people , who are used to trusting banks, etc. There was a time when you trusted your banker to the max. They knew all the ins and outs and were honest with a borrower. I find it even more hilarious that most of you have accepted the fact that these people are now crooks, how placant of you. Blaming the borrower is so much easier than admitting that people we should trust are screwing us. Instead of standing up and voicing your indignation at the banks, i guess it’s so much easier to blame a 74 something old lady. I guess that is what we have become, a country that just sits back and lets the crooks and users and abusers take over. We are going to hell in a handbasket while everyone just nods their heads and blames people that have no control over the situation.
(Report comment)
In a nutshell… ADJUSTABLE MEANS ADJUSTABLE and FIXED MEANS FIXED.
(Report comment)
I learned a valuabe life lesson many years ago: never trust anyone except the person you see in the mirror when you’re brushing your teeth.
(Report comment)
If we all just bought just exactly what we could afford at the time of buying anything in this world..we would not banks or credit…I wonder what that perfect world would be like because it seems like there are a lot of people here judging others who obviously don’t use credit or banks for things which need to paid back over time or maybe your home is paid for and you cannot afford the taxes and its taken because inflation or some other unforeseen situation comes along and your money does not stretch as far anymore…some people talk alot when they are not in a situation and have no empathy..keep in mind before all of this is over everyone will be humbled in some manner….Even LUCKY LADIES…living on social security…what if you all awakened one day and found that it was all gone would that make you feel secure ? stop taking things for granted you are just as vulnerable, we live in a world that is crumbling.
(Report comment)
Comment from Chris
October 5, 2008, 2:38 pm
I find it hilarious that so many of you can judge others. Especially judging older people , who are used to trusting banks, etc. There was a time when you trusted your banker to the max. They knew all the ins and outs and were honest with a borrower. I find it even more hilarious that most of you have accepted the fact that these people are now crooks, how placant of you. Blaming the borrower is so much easier than admitting that people we should trust are screwing us. Instead of standing up and voicing your indignation at the banks, i guess it’s so much easier to blame a 74 something old lady. I guess that is what we have become, a country that just sits back and lets the crooks and users and abusers take over. We are going to hell in a handbasket while everyone just nods their heads and blames people that have no control over the situation.
**@ Chris** I like your style. I agree with you 1000000000%
(Report comment)
You can’t tell me that she had no idea about fixed or adjustable rates. If you are taking out that kind of money, you KNOW what the payment will be, or if it will flucuate. That is why is says to read the fine print.
She says she needs some help. Ok, I think between 4 grown children and 10 grown grandchildren, that someone would have been able to figure this out. Just another sob story……………………
(Report comment)
Maybe, but isn’t there also something to be said for a national culture that blames everyone else except ourselves? A pervasive climate of victimhood is running rampant in our society too. Cases are all different, and it is impossible to judge from the outside, especially when all we have are newspaper accounts - that often are not accurate. It does, however, take two to make a loan. The only part of this sorry affair I am not clear on is, where were the poor woman’s children and grandchildren? Wasn’t there anyone to whom she could turn for some advice?
(Report comment)
This grandmother is my husbands grandma and I wanted to say thank you for those of you who are not bashing her. And as for you others, you dont know what it is like to struggle. You have absolutely no damn right to say this is her fault. Her whole life shes done the right thing by doing what she can to survive and her grandson.As for her grandchildren and children, were all struggling. I know as a fact that if we all had the money wed do it in a heartbeat! So, know your facts before you judge!This isnt some sob story! This is life! Not all of us get fed with a silver spoon.When it comes to surviving and helping I guess some like you people who like to criticize just sit back and play the blame game. Thats not gonna solve anything and when your in a bind which im sure will someday happen, just remember who you judged this woman of courage and love!
(Report comment)
Oh my God shut up. My head hurts now. This old ladys a pretty good con but I’m not buying it. You know a heck of a lot of people voted Republican (Bush/Cheney) and they’re reaping what they sowed. It cracks me up. The more people homeless, the more educated they will become. Rock on!!!
(Report comment)
2 1/2 months later?
Let it go, Angelfire.
(Report comment)
WILLUBEMYKID - Look here, oh we were so poor and you all don’t understand what it’s like, lady. I can guarantee you I was much poorer than you ever were. Your grandma is not special in the grand scheme of things. She is one of thousands, soon to be millions, of people who are going to find themselves in this same position due to stupidity, greed or lack of personal responsibility. Sometimes all three. I get so sick and tired of the ‘poor me’ attitude that permeates so many in this country. Feeling sorry for yourself while holding your hand out waiting for financial rescue. Depending on the government teat like babies who masquerade as adults.
I’m sorry. I just can’t blame the folks/corporations who loaned this money. The blame rest comfortably with the people who had little forethought to read and understand before signing on the dotted line. The rich get wealthier off of people like your grandma.
My life is good right now. If we did lose our home, by one of the three reasons mentioned above, I would not run crying to a newspaper hoping the donations will come flooding in. Neither would I whine about how the government should help me like your grandma does in the article. Another thing the majority has forgotten, self-reliance. As you can see, she’s not going to get much sympathy from the posters on here. There are a couple of your ilk who love the victim mentality devoid of personal responsibility who posted, but they grow fewer in number by the day. Hard, cold reality has a way of culling the herd.
(Report comment)
Back in my younger days, the older people I knew (people the lived through the great depression) never trusted the backs. I’d hear story after story of old people dying and when their relatives went through the house they would fine money hidden everywhere because they didn’t trust the banks.
When all these ARMs were being offered the recent trend in interest rates was down, kind of like global warming track a few decades then project 100 years. Many people thought the rates would stay low. No one told them that hey the avg. interest rate over the last 50 years was over 10% so 3% won’t last.
No one wants to see someone lose a home, but it’s not happening to everyone. Through June of this year there have only been about 750,000 foreclosure notices, with estimates maxing out around 2.5 million for the year. Horrible yes, but many of those homes will be bought shortly there after. The end for one family is a start for another. I don’t recall hearing or reading stories 3 years ago about how the rising home price is horrible for new home buyers. All the stories were about how great the housing market was. There is good in everything.
(Report comment)