Many Mortgage Firms of Stanislaus Have Downed Shutters

The Center for Responsible Lending has conducted a study whose report ‘Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosure’ has shown that the Latinos were targeted by predatory lending by the mega banks in Stanislaus County.

The brokers engaged by the banks were given high commissions for contracting risky loans. The hapless victims, with poor knowledge of English and ignorant of mortgage terms were taken for a ride and made to sign loans with even when they were eligible for traditional loans with affordable terms.

Yamilet Valladolid, who operates El Concilio Council for the Spanish Speaking at Modesto, said the Hispanics were cheated by brokers coming from their own community whom they trusted. Their income figures were juggled with to make them qualified for mega loans that were sure to push them into foreclosure.

Valladolid said, “In Latin America, most people who own their home build it up from the ground up … and once it’s done, they have no mortgage. So they didn’t understand”. Most of them did not grasp the basics about loan conditions and focused only on the initial monthly dues.

Matt Crawford of All American Mortgage (the president during the boom years) place the blame on the borrowers for their loan troubles as this was their share of the responsibility. It was they who put pressure on the brokers to get bigger and bigger loans. He added that the kind of loan sanctioned depended not on the race of the applicant but on the qualifications. In 2004 Crawford’s firm had 130 loan officers.

Bigger loans meant higher rates of interest and other unpalatable loan conditions. His staff had explained these details to the borrowers when the latter took the loans but later they must have forgotten all that they had agreed to abide by.

Crawford admitted that the brokers were given monetary incentives for getting more risky loans but the difference in commission was not more than $1,000 or $2,000.

New reform laws have limited those commissions and hence these bonuses can no longer be paid. This has dulled the mortgage business – not as lucrative as before and hence none of the unethical brokers are in business any more. Crawford’s firm has lately linked up with Bank of Commerce Mortgage; working under him are 32 loan officers.

Many mortgage firms of Stanislaus have downed shutters while thousands of their former clients have lost their houses to foreclosure.