Fraud Worsens Foreclosure Crisis-Scams to Stave Off Foreclosures Victimize Home Owners Again

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Fraud Worsens Foreclosure Crisis
Scams to Stave Off Foreclosures Victimize Home Owners Again

Illustration by: Matt Mahurin
By Mary Kane 08/21/2008


ACCOKEEK, Md. - At The Barber's Chair, in the small, quiet community of Accokeek at the far end of Prince George's County, Md., the talk often turns to the foreclosure crisis -- for good reason. Here, in the nation's most affluent majority black jurisdiction, a remarkable example of the growing wealth of the new black middle class, foreclosures are growing at one of the fastest rates in the country, and foreclosure fraud is increasing right along with it.

With locals constantly in and out, Leo Harrington, the owner, hears it all. How people who bought homes once valued at $800,000 down the the road at upscale subdivisions like The Preserves or at the one- and two-acre homesites of St. James have friends and relatives living in their basements to help pay the mortgage.

How lenders pushed deceptive and high-cost loans on first-generation homeowners, without disclosing the consequences, assuring them that home values only go up. How people bought expensive cars, timeshare vacations and boats -- and put their homes at risk. How lenders continue to target the community and push loans. And how homeowners, with years of mistrust in mainstream lenders, wait too long to get help when they fall behind on their loans, wary of trying for a short sale or a loan workout, and so fall prey to foreclosure scams.

"A lot of people moved out here from the District because they wanted to be in the 'burbs and raise their kids here," said Harrington, 49, who also is an associate minister at a nearby church. "You find you can get a bigger house that's in pretty close, and a yard. But there were all these predatory loans. That's all it was. They didn't realize how the loans worked because when folks are lying to you, you don't know any better. Then, when they find out they are in trouble, they start to panic, and they end up losing their homes."

Harrington's views are one explanation of many for the unexpected rise in foreclosures in Prince George's County and in other Washington-area communities, which had, until recently, been largely immune to the housing crisis. Overall, foreclosures in Prince George's and in the Washington area remain lower than in national hot spots, like Florida or California, but the area experienced a six-fold increase in foreclosures from February 2007 to last spring -- a jump that has local officials worried and perplexed. Why here, and why now?

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http://washingtonindependent.com/view/foreclosure-fraud