By Robert Cyr
Ramon Lopez has avoided foreclosure on his New Britain home – at least until March – but he’s one of the fortunate Latinos in Connecticut. More and more have been hit harder by the ongoing recession than any other group – and are losing their homes to foreclosures in greater numbers due to high unemployment and language barriers, according to state Latino and housing advocates.
CT Latino News first reported on the issue of Latinos caught up in foreclosures in July when Lopez, a 58-year-old laborer from Puerto Rico was set to be removed from his home of 16 years after falling prey to a scam and faced several additional hurdles due to his limited English ability.
After his request to re-negotiate his mortgage was turned down three times by Wells Fargo, the family turned to the California based State Law Group, which promised him a free foreclosure aid program, telling him it was an Obama program – but ultimately charged Lopez more than $5,000 for “processing paperwork ” fees – and the fraudulent company never negotiated a deal with Wells Fargo.
Like many in similar situations, Lopez owed more than his home was worth. His $175,000 loan was for a house worth about $100,000, according to Lopez’s lawyer, William Rivera.
Since the first series of articles appeared on CTLatinoNews, Lopez’s special case drew support from state legal specialists, resulting in a renewed scrutiny of the State Law Group and Wells Fargo, Rivera said. The bank has agreed to re-examine Lopez’s situation and he has been allowed to stay in his home after eviction proceedings were stalled. Lopez would have had to leave his house at the end of October.
“Wells Fargo openly admits that, because of the press the case got, they’re paying more attention,” Rivera said. “He (Lopez) is preparing for both outcomes, but at least now he knows he’s getting a fair evaluation.”
Facing more state scrutiny, the State Law Group also cut Lopez a check reimbursing him for more than $3,000, or about 60 percent of what he paid the company, Rivera said. If Lopez loses his case, he could still be forced out of his home in March.
Jeff Gentes, a foreclosure prevention attorney for the Connecticut Fair Housing Center, said his organization has gotten calls from at least 100 Latino households in the past three years – all facing some phase of the difficult foreclosure process.
Before the start of the big dip in the economy three years ago, Latinos on average were given more risky, predatory loans based on their credit profiles, Gentes said. “The fees and interest rates associated with these loans were higher than those associated with white home buyers, and combining that with a higher unemployment rate has led to a lot of what we’ve seen,” he said.
Werner Oyanadel, director of the Latino and Puerto Rican Affairs Commission said his group joined a results-based study earlie this year to get a better picture of housing for Latinos in the state. The rate for Latino home ownership fell from 36 percent in 2008 to 34 percent in 2011, according to a commission report.
The relationship between foreclosures and Latinos in the state is harder to pin down, he said, and that kind of data isn’t readily recorded and tracked.
“That information is just unavailable. There is a void of data being available being collected on the state level,” he said. “For us that’s a disadvantage. Not having that data, it’s difficult when we’re trying to make a case in the legislature for aid.
Like with elections, race or ethnicity isn’t recorded with housing cases and researchers have to take a non-scientific survey of cases by looking at last names on documents and recognizing them as Latino, Oyanadel said.
Nationally, Latinos are also disproportionately troubled by foreclosure, with a foreclosure rate of 11.9 percent, more than double the rate for whites, at 5 percent, according to a report earlier this year by the Center for American Progress. About 25 percent of Latinos have lost their homes or struggle with serious delinquency, compared to 12 percent of whites, according to the report.
A study by the Pew Hispanic Center in January showed that the homeownership rate for U.S. Latinos dropped to 47.4 percent in 2011 after hitting a record-high of 49.8 percent in 2006.
In a separate Pew survey, 28 percent of Latino homeowners said they owed more on their house than what they could sell it for—double the amount of homeowners in the survey who responded the same. More than 40 percent of Latino homeowners in the Northeastern U.S. states claim their mortgages are in trouble, more than in any other part of the country, according to Pew. Newer Latino home buyers fared poorly as well, with 39 percent of those who borrowed between 2000 and 2011 claiming to owe more on their home than they could sell it for.
Gentes said he didn’t expect to see an end to the trend of foreclosures and an improved economy any time soon.
“Essentially we’ve been in an elevated crisis level for three years now. I can imagine this is going to be an ongoing issue, especially with the job market slowed,” he said. “We’re in it for the long haul.”
By Robert Cyr