Should we feel sorry for this family because of “their” bad choices?

Deal Score0

The American Dream turns into a debtor’s nightmare
A sad, but common, tale starts with alleged predatory lending, intensifies with impossibly high payments and usually ends in foreclosure.
By Jennifer Delson and and Christopher Goffard, Los Angeles Times Staff Writers
October 8, 2007
Soledad Aviles dreamed for years of owning a home, with a plot of land where he could grow corn and chiles as he did in his native Mexico. So he felt blessed last year when he learned he could buy a three-bedroom, single-story stucco house on West La Verne Avenue in Santa Ana.

Referred to a local loan broker by a trusted friend, he borrowed the entire purchase price of $ 615,000 from Washington Mutual at a high interest rate typical of sub-prime loans. The monthly payment, as he says he understood it, would be $ 3,600 — steep for a glass cutter who made $ 9 an hour — but Aviles counted on his wife and three of his six daughters, who also worked low-paying jobs, to contribute.
“We took out our pencils, figured out our take-home pay and figured out that if we all pitched in, it would work,” said Aviles, 54, a stoop-shouldered, soft-spoken man with a sixth-grade education from Mexico.

Relying on the broker’s word, he signed loan documents written in English, a language he neither speaks nor reads, Aviles said. He was shocked to learn afterward that the monthly payment would not be $ 3,600, but $ 4,800 — a price that forced him to rent out bedrooms, the garage and an enclosed porch while he and his wife slept on the couch. He fed his family with food from friends and corn he grew.

Aviles says he was not aware that the February 2006 loan application he signed dramatically exaggerated his family’s income. The application lists him as the owner of a landscaping business with a $ 7,400 monthly income. His 27-year-old daughter Marlene, who earns $ 9 an hour in a noodle factory, appears as the owner of a housecleaning company who makes $ 5,700 a month. The application lists their yearly income as $ 157,000, when, according to Aviles, it was really closer to $ 60,000.

Now, five months behind on his payments, Aviles is scrambling to sell the house before the bank forecloses. Desperately ill from kidney disease and unable to work for the last year, he sits dejectedly at the dining room table, wondering when the bank will kick him out.

Aviles’ situation is hardly unique. Add his name to the ever-expanding list of casualties in the nationwide sub-prime mortgage debacle, his experience echoing that of thousands who bought homes in recent years only to find themselves in a sagging market saddled with payments they cannot make.

But amid the storm of foreclosures, his story illustrates the special vulnerabilities of first-generation immigrants in places like predominantly Latino Santa Ana, where city leaders have identified about 800 sub-prime borrowers facing the potential loss of their homes.

“We think this is just the tip of the iceberg, in terms of the breadth and depth,” said Steve Harding, Santa Ana’s deputy city manager. Apart from the language barrier, he said, many first-generation immigrants might have been especially vulnerable to sub-prime lending because they avoided checking accounts and credit cards, which prevented them from qualifying for regular loans.

The city has teamed with the Fair Housing Council of Orange County to offer free foreclosure prevention workshops, hoping to teach people to avoid predatory lenders and find help as they face the loss of their homes.

The Fair Housing Council said the number of people seeking help over mortgage woes, many of them Latinos living in Anaheim and Santa Ana, has soared. The group typically receives 15 to 20 complaints annually, but in September of this year the group received more than 20. The state Department of Real Estate, nonprofits and the Mexican consulate also have reported a rise in mortgage complaints, many of them from homeowners saying they signed documents they didn’t understand.

Across the state, many cases are landing in court. Kerstin Arusha, a directing attorney at the nonprofit Law Foundation of Silicon Valley, said that Spanish speakers, along with the elderly, “seem to be hardest hit by both sub-prime lending and predatory lending. There are many borrowers out there that were misled about the terms of the loan.”

The Law Foundation is suing a broker, real estate agent and lender in federal court on behalf of nine Santa Clara County families, many of whom speak only Spanish, contending they were lured into mortgages they didn’t understand. The lawsuit alleges that the broker inflated incomes on loan applications, misrepresented the terms of the loans and stuck clients with higher payments than they had been promised.

The victims “thought they saw the promise of the American Dream, and instead they ended up with a nightmare,” Arusha said. “I think they were seen as easy targets for predatory lenders who could sell them a bill of goods without giving them disclosures in a language they understand.”

The Law Foundation is handling 10 other cases involving predatory lending, half of them for Latino clients, Arusha said.

But in Orange County, the district attorney’s office has not reported an increase in prosecutions for fraudulent lending. Elizabeth Henderson, a prosecutor in the county’s fraud unit, said many such crimes go unreported in immigrant communities because of a distrust of law enforcement and confusion over what had occurred.

“They’re not really sure what they were promised, so they don’t know if they were cheated,” she said.

Sitting in his Santa Ana home, waiting for the bank to kick him out or for his kidney to kill him, Aviles did not hesitate to characterize what had happened to him: “They used me, nothing more.”

He was led astray, he said, by a man he had considered a dear friend, Carlos Lares. They used to work in a factory together. He said Lares showed him about a dozen homes, including the one he bought, and offered to arrange a mortgage.

State records show Lares lacks the real estate license required to show homes. In an interview with The Times, Lares denied showing homes and said he merely took Aviles to the office where he works, Century 21 South Coast. He declined to comment further. His business card lists him as a “team service associate.”
Part of me does feel bad for him, but he was stupid to think he could even make payments o $ 3600 a month, when he and his wife only make $ 9.00 an hour.

WE should not have to bail him out or bail out others like them. This article is the start of letting the taxpayer bail these people out of their situations. Screw the people who made educated choices.
“””Jesus, Mary and Joseph…..a $ 600K house? $ 9/hr income. You must be kidding me. What was this man thinking in ANY language??? “”””

LOL that is the going rate in this part of the country. What is sad……. the majority of Santa Ana is a dump…… it is an illegals haven…… It is little TJ

  1. Reply
    February 5, 2011 at 7:41 pm

    Someone who makes $ 9/hour has no business buying a $ 600,000. piece of property. Anyone with any common sense knows that regardless of how much a bank tells them thay can afford.

  2. Reply
    February 5, 2011 at 8:26 pm

    I’ve heard a few stories like this. Clearly predatory lending is involved, in that they never should have qualified for the loan.

    But where all common sense breaks down is when these “victims” argue that because of those meanies they are now in danger of losing “their house”.

    HA! it was never their house. They never owned any of it. They didn’t put money down and they’re upside down on their loan and they had no business trying to buy that kind of house in the first place. The LAST thing that should happen is some type of arrangement that tries to keep them in the house.

  3. Reply
    February 5, 2011 at 8:56 pm

    He came to America should have learned English.

  4. Reply
    February 5, 2011 at 9:18 pm

    the old saying goes, don’t sign it if you haven’t read it… if you do not understand or read English, get an attorney that does.
    this claim that, “oh, i didn’t understand,” is getting a bit old !!!!!! it doesn’t work for citizens and it should not work for them!!!
    who buys a house without a lawyer??????????? a nut, that’s who!!!

  5. Reply
    dropping bombs on your mom
    February 5, 2011 at 9:43 pm

    Honestly…I would not feel comfortable if I were them signing contracts and papers in a language that I do not speak. I would want someone to explain it to me in my own language before i signed. I know the guy was his friend and he trusted him but still…if I couldn’t read it, I wouldn’t sign it.

  6. Reply
    A Human Bean
    February 5, 2011 at 10:10 pm

    The broker was wrong and should go to jail for what he did, but the family was just as wrong.

    On $ 9.00 per hour he could not afford a mortgage at all in the California housing market. He let his dream get in the way of commonsense.

  7. Reply
    February 5, 2011 at 10:23 pm

    You come to this country illegally and expect to exploit the American dream.Having the tax payers pay for your medical and educate your kids. I got 1 word to say to this guy………ADIOS

  8. Reply
    February 5, 2011 at 11:05 pm

    Yes, it is a bit sad, but. . . If he and his wife cannot make the payments themselves then they had no business trying to buy a house of that worth. Also, if he is unable to speak or read English, he has no right to take out a loan written in English, so sorry but his signature is on the documents. If he wants to cry foul, well too bad, because a gun wasn’t put to his head to force him to sign. Even if he did qualify for it, he should have had someone he trusted who speaks/reads English to help him out, or better yet learn our language!

  9. Reply
    February 5, 2011 at 11:18 pm

    This is a question about managing your money properly. I think too many people not only immigrants got a little greedy when the housing bubble was at its peak. I certainly would not buy a house that I can’t afford and that is not worth it! It was the lenders fault and the buyers fault. They were handing out loans like candy to anyone who would take them! That’s just ridiculous! Now look what happened, they are stuck with this high payment plus now the house is going down in value, if anything. I keep hearing that the gov’t should get involved. Why? So does the gov’t need to get involved whenever someone makes a bad decision? Then my money is going to go to bail them out? Where does it end? What about car repos? I don’t think so. My husband and I could’ve bought in to that housing market but we decided to wait. We make good money combined (Over 100k) and we still think it is cheaper to rent than buy. Plus everything is going down and there is more supply than demand now so it is a buyers market. We are glad that we waited. So I am not willing to pay my hard earned money for the mortgage companies greediness and others mistakes!

  10. Reply
    February 5, 2011 at 11:27 pm

    This is a good argument for learning English.

  11. Reply
    February 6, 2011 at 12:08 am

    Too bad for those undocumented breeders. They don’t print the number of Americans swindled out of their hard-earned money by all the get rich quick scams.

    Conducting business when you don’t speak the language is dangerous. Because they don’t have common sense, they dug their own holes and won’t receive an ounce of pity from me.

    Many Americans never see their American Dream, WHY should Mexicans feel they deserve to cash in on it??

    There’s an old saying—

  12. Reply
    February 6, 2011 at 12:22 am

    Have you ever signed your name on anything that you did not understand? Me neither. Have you ever bought something so far above your means that you needed to have most of your family pitch in to pay for it for the next 30 or so years? Me neither. Have you ever moved to a country that spoke a different language than you, and not bothered to learn that language? Me neither.

  13. Reply
    February 6, 2011 at 1:12 am

    No, I do not feel sorry for him at all. If he could read ENGLISH, he would have understood the papers he was signing.

  14. Reply
    Dirty(er) Martini
    February 6, 2011 at 1:22 am

    Jesus, Mary and Joseph…..a $ 600K house? $ 9/hr income. You must be kidding me. What was this man thinking in ANY language???


  15. Reply
    February 6, 2011 at 1:36 am

    He borrowed over half a million dollars to buy a home? He makes nine bucks an hour and somehow felt that a $ 615,000 home was feasible? Oh wait, he thought a monthly mortgage of 3600 bucks was manageable? When it turned out it was $ 4800 a month that was impossible? Wait, wait, I own a calculator…let’s see… at nine dollars an hour that’s TEN WEEKS of work just to pay FOUR WEEKS of mortgage payments. That seemed like a good idea? You mean it real mattered that the payments went up to $ 4800?
    I’d be the first guy to say that the lender is scum and deserves to be sued if all the stuff in that article is true. It very well might be, and hopefully, somebody goes to jail and doesn’t just have to pay a fine out of the profits they made. But, come on, taking out a 615,000 dollar loan when you make nine bucks an hour? I don’t care if he had sixteen working kids! Regardless of a language barrier, common sense has to kick in somewhere! If he could put aside $ 3600/mo for a mortgage, he could put away 2000 for a year or two and have a pretty healthy down payment.

  16. Reply
    February 6, 2011 at 1:36 am

    it happens to english speaking U.S. citizens every day where they sign something they either did not read or did not understand. not reading the contract is not a defense you should never sign something you cannot read. all the more reason to learn the language. there are interpreters and bilingual attorneys who could have gone over the contract prior to his signing. if he did not avail his self of them then he is s.o.l. in my mind. there should not be special rules for non english speaking people. i say since we accommodate non english speaking people in our society that they should be on the hook without a means of getting out of the contract. to do otherwise would be to have special rules for special groups. heck most of us that sign contracts do not understand them as they are written in legalese and we’re still held to the contracts we sign.

  17. Reply
    Angel Primeau
    February 6, 2011 at 1:53 am

    Even I know “If it looks too good to be true, IT’S NOT!!”

    Come on, seriously, they’re so blinded by greed, they’d fall for those Nigerian tricks.

  18. Reply
    Free As A Bird
    February 6, 2011 at 2:49 am

    Well,he should of stayed in Mexico and planted corn and chilies instead of whining about being used. I wonder why about 20 people living with him still couldn`t make the payments at about 20 thousand a month-too busy buying other stuff? No matter what,who cares? Go home then or shouldn`t of been here anyway if not learning English-too bad,so sad. How is he going to understand getting help if he don`t understand nothing anyway? Nobody helped him much in the first place,maybe on purpose to get a big house for all the friends to move in. It also sounds like a sob story,yet he knew how to figure to pay when they bought out all their pencils,suddenly it got screwed up. This whole story reeks.

  19. Reply
    Nicole J
    February 6, 2011 at 3:04 am

    My heart goes out to those American citizens who have fallen victim to illegal aliens. I know this doesnt answer the question, but it must be pointed out these illegal aliens do not have the same rights as American citizens. I do not feel sorry for the illegal in the least

    Whoever gave him the loan should be thrown in prison for giving a loan to a clear illegal alien If he would of learned english before he came here instead of spitting on this country and expecting things he isnt entitled to he wouldnt have this problem. I hope he gets deported

    This illegal should go back to Mexico where they belong

  20. Reply
    February 6, 2011 at 3:49 am

    i feel sorry for them….if this was an american..not of hispanic descent would you feel sorry for them…more likely….someone does need to help them…

    wow some people amaze me… they never said in the story that he was illega…so where are people getting their information?

  21. Reply
    February 6, 2011 at 4:18 am

    No, I do not believe we should feel sorry for them.

    Leave a reply

    Register New Account
    Reset Password