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WORKERS, FAMILIES, ALLIES LOBBY LAWMAKERS FOR MORTGAGE AID

(PAI)WORKERS, FAMILIES, ALLIES LOBBY LAWMAKERS FOR MORTGAGE AID
By Mark Gruenberg
PAI Staff Writer

    APPLE VALLEY, Minn. (PAI)--Graying, distinguished,
voluble music teacher Al Ynigues hasn’t lost his house
in Apple Valley, Minn.--yet.  But he’s on the verge of
doing so, as are millions of other people, unless
Congress steps in to help.

    And that need led Ynigues and several hundred other
homeowners, from as near as D.C. and Philadelphia and
as far as Oakland and Seattle, to come to Washington
to lobby lawmakers on March 11-12 for mortgage relief.

    Marshaled by the grass-roots activist group ACORN
(Association of Community Organizations for Reform
Now) and with the backing of the AFL-CIO, the
homeowners demanded lawmakers pass bills to prevent
home foreclosures and to help them redo the mortgages.
 The foreclosures have been forced on homeowners by
financial institutions hurt--directly or
indirectly--by the sub-prime mortgage lending crisis.

    But for Ynigues and the others, much of the problem
comes from the lenders own misrepresentations if not
outright fraud.  He took his story to Rep. Keith
Ellison (D-Minn.) and other members of his state’s
delegation--Democratic and Republican--just as he had
taken it to the steps of the state capitol in St. Paul
the month before.

    It is a story that, with variations, could be
repeated by millions of people nationwide now caught
in the foreclosure crunch.

    Ynigues explained he had given music lessons to a
local real estate broker and the broker’s kids, so
when he considered buying a home in Dakota County,
Minn., he approached the broker, expecting an honest
deal.  What he got was anything but.

    The first thing Ynigues got was false information.
The broker steered him away from a first-time
homebuyer’s program the county offered, with a
favorable interest rate
--1 percentage point above the prime rate--that he
could have afforded, and that Ynigues later found out,
from ACORN, that he qualified for.

    â€œBut the broker was very aggressive and gave me a
mortgage with a ‘teaser’ rate of 6.9%,” he told Press
Associates Union News Service, in a story that could
be repeated hundreds of times nationwide.  But after
24 months, that “teaser rate” jumped by three
percentage points, to 9.9%, and his monthly payment
rose to $900.  

    It’s scheduled to jump again next month, to 13.9%,
and $2,400.  Ynigues has to pay the first mortgage,
plus $440 on a second mortgage, taken out to help pay
the first.

    How can he afford that, on a monthly income from
music teaching and consulting of $3,000?  He can’t.
When the broker put in Ynigues’ application for the
loan, the broker arbitrarily changed the music
teacher’s income to $10,000 monthly.  “And he got a
$5,000 ‘annual yield premium’ to talk me out the
Dakota County first mortgage program, too,” Ynigues
says.

    Ynigues is still mad that the broker isn’t on trial
for fraud; a lawsuit on Ynigues’ behalf by ACORN is
pending.  And after seven months on the original rate,
when Ynigues asked the broker if he could refinance to
get a lower rate, he was told it would cost “$7,000 in
closing costs, appraisal fees and inspection fees.”
He didn’t refinance.

    Upset and scared at the prospect of losing his house,
Ynigues took his problems late last year to ACORN.
The housing counselor at its Twin Cities office read
through his papers and gasped: “Oh my God, you got
screwed” and set to work on his case.
He also took his cause to the state legislature.

    But Ynigues is not alone and that was the point of
the D.C. rally as other homeowners, some of them with
babies in arms, told of how other unscrupulous lenders
in the sub-prime mortgage market left them over a
barrel, facing foreclosure.

    They drew support from sympathetic Sens. Debbie
Stabenow (D-Mich.) and Sherrod Brown (D-Ohio).
Cleveland tops the nation in mortgage foreclosures and
Detroit is not far behind, but the whole country is
suffering.  “This fight is about every person who is
in the middle class.  It’s about justice,” Stabenow
said.  

    â€œWe’re trying to put in $200 million in the budget to
go to non-profit organizations for counseling for
these people” to help them keep their home “and
authorize $4 billion for Community Development Block
Grants so cities and towns can step in to help them
keep their homes,  but Bush says ‘no.’  Why?  Because
he wants to spend $3 billion a week on his war in
Iraq,” Brown said.

    The fight over the budget and the presidential
election “are all about” clashing priorities, Brown
added.  “Do you want to spend $3 billion a week in
Iraq or $3 billion”--but not in a week--“for housing
working families in Cleveland, Akron and Toledo?”
    
    Homeowners facing foreclosure also have AFL-CIO
support.  The federation’s Executive Council, meeting
in San Diego March 4, demanded “an aggressive
strategy” from lawmakers to help them, starting with a
6-to-12 month moratorium on foreclosures.  The time
would be used to create traditional 30-year mortgages,
at lower rates,
 
       “Many middle-class workers and individuals
employed in low-paying jobs are one paycheck away from
homelessness.  Many have been victims of predatory and
unscrupulous lenders,” the resolution adds.   That’s
just like Ynigues.  ###