Couple Smart-Talked Into Taking Mortgages Loses House to Foreclosure

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Although Massachusetts is not one of the worst foreclosure affected states, the lenders filed over 22,000 petitions for foreclosure in 2010 and half of these houses have been repossessed. One of the victims was a couple – Pierre Solon and Katty Familia whose house in Boston was swallowed by foreclosure. Their battle for it shows how the families coming from the low-income group are the worst hit.

Solon migrated from Haiti and Familia from Dominican Republic. They operated Little Wonders Daycare Center. For the last two years the couple has been battling to get back their house.

In 2006 they purchased the house in Hyde Park area of Boston for $584,000. They did not make any down payment but took a loan for the entire sum. They both worked hard to finance it by making sacrifices. But when they started to lose their jobs the trouble started; they began to default.

This led to Wells Fargo, the loan servicer to initiate foreclosure action. The couple moved out one year previously and took the help of lawyer Nadine Cohen of Greater Boston Legal Services.

Cohen came to know that Wells Fargo had sold off the house in an auction to an investor for the meagre amount of $115,000. Cohen said, “I think the bank could have offered them a modification of their loan for twice that amount. But the bank would not do that. They would rather see the homeowner displaced from their home with their children, and then sell it to an investor for $115,000”.

Two weeks after buying the house the investor sold it to another one for $270,000 – thus raking in $155,000 as profit. Cohen said that everyone was making money taking advantage of borrowers whose income was low. All made money – the broker, the investors and the servicers while the house owner lost everything.

Familia commented that the selling off of the house at that price was ridiculous; the banks were just playing around with the people. The couple is being blamed for taking on a loan they could ill afford but they were talked into it by Fremont Investment and Loan – a sub-prime mortgage operator of California that has now downed shutters.

The couple was made to contract two mortgage and the payments were nearly $5,000 each month – this being greater than their income.

The attorney general of Massachusetts later sued Fremont for fraudulent lending operations. The company reduced to bankruptcy was closed down. But the loans of the company had been made into securities and purchased by investors.

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