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A Community Helps Out
Maria Leon saved for 15 years before putting $48,000 down on a $242,000 Bridgeport, Connecticut, home where she could live with her daughter and four grandkids. Like four in ten Hispanic borrowers (and more than half of African American ones), she could get only a subprime loan, at 8.1 percent.
In August 2006, Maria was laid off from her job as a spot welder. Then her daughter, who'd been helping with the bills, moved out, leaving Maria to care for Vanessa, 11, Lorenzo, 10, Alexie, 8, and Shawn, 7.
Maria, 47, was three months behind on the mortgage by the time she landed a factory job paying $1,800 a month. She called the servicer, hoping for a rollback of the overdue payments. "All they did was send tons of forms to fill out," she says.
She paid $600 to a financial services company to get her loan modified. No luck. They sent her to a lawyer, who charged $150 and advised her to file for bankruptcy.
The bank posted a Public Auction sign in her yard. "I'd go out the back door so the neighbors wouldn't see me," she says. "The kids asked where we'd go. I had to tell them I didn't know."
Soon after the house was sold, Maria had a heart attack. The kids, who attended an after-school program at Summerfield United Methodist Church, told Rev. Marjorie Nunes what was going on. Nunes discovered that no one had bid at the auction, so the bank had bought the house but hadn't yet transferred the title. Legally, Maria still owned it. The pastor and a team of volunteers negotiated with the bank, which offered to sell the house back if Maria paid $50,000 to cover late fees and foreclosure costs. Nunes, a pit bull in high heels, demanded a deal Maria could actually afford.
The officer said the $10,000 the group had raised wasn't enough, then called back to accept the offer and agree to Nunes's other demands—forgiving $30,000 in foreclosure expenses and rolling back the interest to 2.5 percent for the next five years.
Maria burst into tears. The kids jumped up and down, screaming, "We're not leaving!" Maria can't believe her good fortune: "I can walk out the front door with my head held high. I've opened the shades to let the sunshine in, and I'm going to plant flowers in my yard, because we're going to be around to enjoy them."
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