ROBERT SIEGEL, host:
Last month, more than 100,000 Americans received foreclosure notices. We've reported a lot of gloomy statistics such as that one about the mortgage crisis. And behind every number lies a story of a family or an individual. Over the next three days we're going to hear from people who find themselves caught in the crisis.
For our first report, NPR's Greg Allen spent time with a Florida woman who is working to save her home but finds herself with few options.
GREG ALLEN: It's a weekday morning in Royal Palm Beach, one of Florida's many brand new communities. Single mother Avery Salkey and her 11-year old daughter Jade are trying to start their day.
Ms. AVERY SALKEY (Resident, Royal Palm Beach, Florida): Jade, time to go.
ALLEN: Salkey works for an insurance company. Her daughter is in the sixth grade at a private religious school nearby.
(Soundbite of reversing car)
Allen: They pile into Salkey's aging Jeep Cherokee, their first stop is just one block away. That's where Salkey's mom lives, and she has Jade's lunch waiting.
Ms. SALKEY: My family likes to stay together. I have an aunt, that's just down the road and I have another aunt at - from another community going up. That's the way we always grew up and that's the way they like to keep it.
ALLEN: Salkey's family is from Jamaica by way of New York. She moved here four years ago from the Bronx. And with some help from her mom, bought a home in a brand new development - Madison Green.
(Soundbite of gate opening)
ALLEN: It's a spacious four-bedroom house, still nearly brand new with gleaming appliances and a polished ceramic tile floor. But Salkey is not sure how much longer she'll live here. She's facing foreclosure and for months has desperately looked for a way to save her home, so far without success. It's a story that began well, the story of a single mom who, with the help of her family, was making a fresh start. She made a substantial down payment and got a great fixed interest rate, just 5.3 percent.
Ms. SALKEY: With my mortgage, along with tax and insurance, it was just about 1,500 - a little bit over 1,500 a month. And that was a very - you know, I thought that was pretty good.
ALLEN: But a serious of bad decisions soon got her into trouble. Salkey bought the house while she was still in New York with a good paying job. After closing, she moved to Florida where she says it took her longer to find work than expected. She made her mortgage payments but they were often late. And the bank threatened foreclosure.
To avoid that, through a mortgage broker, Salkey found a lender willing to refinance her home. It was a larger mortgage that gave her back $20,000 in cash. Money she used to pay off some debts. She says she didn't pay too much attention to the paperwork. And when it came time for closing, she was shocked at the terms.
The new loan was an adjustable mortgage that started with the interest rate of 10 percent. And her monthly payments doubled.
Ms. SALKEY: When I finally saw, you know, the figures and what my payments would be, I said, you know, this is too much, I can't afford this.
ALLEN: Her broker told her to try to make the payments on time for six months, and she might be able to find another lender who would give her better terms.
But unbeknownst to Avery Salkey, there was a rub. Her new lender, Yale Mortgage, isn't a traditional mortgage company. It's a private firm known as a hard money lender. It's A company that doesn't bother to qualify borrowers to look at their income or their ability to pay. Yale and other hard money lenders make their loans solely on equity.
And at that time, Salkey estimates she only owed about $160,000 on a $380,000 house. She struggled to make her payments, but soon found refinancing with another lender, wouldn't be possible, in part because of Yale's hefty pre-payment penalty. She now calls Yale Mortgage a predatory lender whose only intention was to take her home.
Ms. SALKEY: Basically, what it is you have enough equity in your home, that is more profitable for us to take it than, you know, than work with you.
ALLEN: The owner of Yale Mortgage defends his company as an important part of the market - a lender of last resort for high-risk borrowers who have equity. He wouldn't talk on tape, but he acknowledges that half his clients are currently delinquent on their payments and that he will foreclose on many.
Avery Salkey made her last payment to Yale in August. In November, her adjustable rate jumped even higher to 12 percent. Between the declining market, which has sapped the value of her home, and Yale's legal fees and penalties, Salkey expects to be left with nothing after foreclosure and now may sell the house at a loss. It's a situation that's left her bitter.
Ms. SALKEY: It's raping me, you know, of everything, raping me of everything because providing me with a loan that I cannot afford? That means it was your intent in the first place to come and take the home away from me.
ALLEN: Salkey's story is an extreme version of one that's happening to millions of people across the country. When home values were rising, even adjustable-rate mortgages with high interest rate looked good. But now that the market has tanked, those same mortgages have become anchors - dragging homeowners into insolvency. As desperate as she was, Salkey says out of embarrassment, she didn't talk to her family and friends about her financial problems, and that she says now, was a mistake.
She's begun working with Acorn, the community-housing activists, and has traveled to Tallahassee to talk to state legislators. But at least at the time of this interview, she still hadn't shared her problems with her family.
Ms. SALKEY: I guess I am just waiting to see if maybe I can hopefully get it rectified because we put a lot of money into the house and my mom gave me a gift. So, it's kind of hard.
ALLEN: When asked, if she sees any way for her to stay in her home, Salkey says only, I don't know. A foreclosure notice was delivered in February, but she wasn't home to receive it. Ironically, she was at a workshop listening to then Housing Secretary Alphonso Jackson speak about how to avoid foreclosure.
Greg Allen, NPR News, Miami.
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