Transcripts

Housing Scams, Foreclosures On The Rise In Our Region

MS. REBECCA SHEIR

00:00:02
We turn now from how Washingtonians move around to where they live. We've heard a lot over the past few months about our local housing market picking up, but actually many home owners are still struggling with debt. And increasingly, they're desperation is making them a ready target for scam artists. Jacob Fenston has the story.

MR. JACOB FENSTON

00:00:22
Luis and Margarita Garcia moved to Montgomery County in 1999.

MS. MARGARITA GARCIA

00:00:27
Yes, we are a family of immigrants that came from a El Salvador.

FENSTON

00:00:32
At first, they lived crammed into a single bedroom.

GARCIA

00:00:34
My children, my husband and me.

FENSTON

00:00:36
After six months they worked their way up to a basement apartment, then a larger apartment above ground. Then, just five years after coming to the United States--

GARCIA

00:00:45
We had the opportunity to have the American dream, to have our own house.

MR. LUIS GARCIA

00:00:52
I will say it like it was like a pretty, pretty amazing feeling. Like one of your goals was done.

GARCIA

00:01:01
We came from nothing. From nothing and then--your house. It's amazing.

FENSTON

00:01:06
That was 2004. When the recession hit, they were in the absolute wrong lines of work. Margarita cleans houses and Luis is a heating and cooling technician. His company cut his hours.

GARCIA

00:01:17
And for me, too, I started losing some of my jobs.

FENSTON

00:01:20
Suddenly, between the two of them combined they had the income of one part-time job.

GARCIA

00:01:24
I don't know how to say that sentence. We left behind on the payments.

GARCIA

00:01:30
We were behind on them.

GARCIA

00:01:31
We were behind on the payments. We cannot afford it in that time.

FENSTON

00:01:36
But they were determined not to lose the house. Margarita researched programs to help homeowners and she applied for a loan modification to lower their payments.

GARCIA

00:01:45
I cannot tell you how many times we apply for a modification.

FENSTON

00:01:49
At one point they found a man who promised to help, a realtor.

GARCIA

00:01:53
It was $500.

FENSTON

00:01:54
And he made them pay upfront. He did help them with paperwork, but he also lied to them.

GARCIA

00:01:59
We found that he was doing our signatures. He falsified those signatures.

FENSTON

00:02:05
He botched their application and he made them pay for services that nonprofit, government-backed groups provide for free.

FENSTON

00:02:16
Manuel Ochoa moonlights as a radio host at a station in Wheatland, Md. He does a weekly show about housing and credit called “Consejos Financieros”.

FENSTON

00:02:27
Ochoa's real job is at the Latino Economic Development Center, a non-profit that offers free housing counseling. He says the majority of his clients have already been scammed by the time they find their way into his office.

MR. MANUEL OCHOA

00:02:38
That's really the main reason why we decided to go ahead and have a radio show, is to combat the scamming and the misinformation that was taking place.

FENSTON

00:02:49
Ochoa's group worked with the Garcias, who finally after four years were granted a loan modification late last year. Montgomery County, where the Garcias live, is among the jurisdictions with the highest foreclosure rates in Maryland, making it a target for scammers. They're also targeting Prince George's County, ground zero in the local foreclosure crisis.

MR. STANLEY YOUNG

00:03:09
I got the number off the TV. They had a commercial on TV.

FENSTON

00:03:13
Stanley Young, who drives a delivery truck for a living, got behind on his payments on his Prince George's house in 2008. He was in a pinch and didn't know where to turn.

YOUNG

00:03:22
And I called the number and the guy was asking me for my routing number to my checking account. And so I said, why do you need my routing number to my checking account?

FENSTON

00:03:32
Eventually, he saw an ad for a free and legitimate housing counselor, who helped him work with the bank. Just this month, he got the news, he was okayed for a loan modification, extending the loan, but bringing down his payments.

YOUNG

00:03:44
I'm back on track. That's what I needed. I needed a fresh start.

FENSTON

00:03:48
He's one of the fortunate ones. In his zip code in Prince George's, one in five homeowners has gotten a foreclosure notice in just the past year or so.

MS. MARY HUNTER

00:03:56
It's just the bubble hit this county very hard.

FENSTON

00:03:59
Mary Hunter directs the counseling program at the housing non-profit HIP Services, in Hyattsville. In the past few months, foreclosures in Maryland have spiked after two years of much lower rates. Hunter says that's in part because of a law passed in Maryland in 2010 requiring banks offer in-person mediation to homeowners before foreclosing.

HUNTER

00:04:17
That year, we saw this sort of what was really an unofficial moratorium. It gave us a chance to really work with the banks and, you know, under less pressure of the foreclosure sale.

FENSTON

00:04:27
Borrowers like Stanley Young and Luis and Margarita Garcia were able to use that unofficial moratorium to get help and work out a solution with their lenders to keep their houses. But housing counselors worry there are many more homeowners who aren't doing that. Instead, they're just getting farther and farther behind, meaning that with each passing month the prospect of holding onto their homes becomes more remote. I'm Jacob Fenston.
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