More Subprime Refinance Homeowners Facing Foreclosure

In Philadelphia, Pennsylvania, Philadelphia City Paper reports, among other things, two stories of local residents who are threatened with the loss of their homes as a result of subprime mortgage refinancings of their homes, in which they reportedly ended up signing for mortgages the terms of which were different than what was orally represented to them.

In one case, a 30 year old legally blind woman suffering from kidney failure, diabetes and congestive heart failure, living in a home she inherited from her father was sold on a mortgage in which the payments were considerably more than waht was promised to her. Because of her impaired vision, she depended on others to explain the mortgage. She ultimately defaulted and the home is in foreclosure. Naturally, neither the mortgage brokerage owner nor the attorney present at the closing, have any recollection of the woman's mortgage. The woman apparently is not going down without a fight, however, as her case has been picked up by the non-profit law firm, Community Legal Services of Philadelphia, which hope to prove that she was the victim of predatory lending, the practice of deceiving a borrower into accepting a high-cost loan or a loan they can't afford (legally or illegally), and stave off her foreclosure.

In another case, the apparent victim of deception in a subprime refinancing is a 69 year old grandmother who relied on the representations of her cousin who was the mortgage broker she went to for her loan. At the moment, she is working with ACORN and Legal Aid, hoping to reach an agreement with her mortgage company. She hasn't confronted her cousin yet, and she can't believe that he would have purposefully deceived her.

For more, see Betting the House (How bad is the subprime crisis in Philly?) (if link expired, try here).