And for all the homes sold in the last few years, foreclosures now seem to be everywhere. The easy availability of subprime loans, offered to people who couldn’t qualify with traditional lenders, set the stage for the staggering number of foreclosures that critics argue is one of the reasons not only for the shaky state of the loan industry, but also the much talked about recession that is looming.

The numbers tell the story: according to RealtyTrac, a firm that analyzes such data, from January through November 2006, there were 1,149, 466 foreclosures in the United States. From January through November 2007, there were 1,987,546 foreclosures. That’s a jump of 73 percent.

“Person after person has explained to us that the way this stuff works is that they tell you a lie upfront, that your payment will be at a certain level. The subprime lenders, this is their strategy. It is not illegal to lie to people in this process. Provided that once you get to closing, the paperwork actually tells the truth,” says Madeline Talbott, lead organizer for Action Now, a grassroots nonprofit organization based in Illinois that helps working families who are faced with housing and foreclosure problems.

“Even really smart, experienced people are getting into this and that’s why this house of cards is falling down all around us. If it was just one or two people who weren’t educated and couldn’t read, that would be one thing. It’s an epidemic, it’s huge, and it’s beyond anything we’ve seen since the Great Depression.”

According to those in the business, consumers who signed up for an adjustable rate mortgage should contact their lender immediately to work out affordable payments.

“It’s one of those things that we have discovered in the case of individuals who have financial difficulties like these, about 50 percent of the time homes are foreclosed on, the borrower never reached out at all. To either the lender or the mortgage service,” says U.S. Treasurer Anna Cabral. “Instead what they should be doing is being a little more proactive because mortgage services or their lenders are not interested in owning their home. The best thing that could happen would be for the two sides to sit down and have a conversation and there are a number of options that are clearly available.”

Cabral notes that the government sponsors the “Hope Now” project, a coalition of organizations working to help those who hold a subprime loan that has the potential to reset to a higher rate of interest. She says the Federal Housing Administration (FHA) is also a good place to start when looking for financing options and information.

Rosa Chavarria, a mortgage consultant at Wachovia, the fourth largest bank in the United States, says the FHA has a secure mortgage that begins with a modest 3 percent down payment. She says that in her experience, the banks aren’t really at fault.

“Rates are low. First time buyers are going to get a fixed rated mortgage. There’s no reason to put them into an adjustable rate mortgage. I would say don’t get into adjustable rate products, and don’t take the equity you have in your house out. It’s a great time to buy a house.”

Monica Vaca agrees. As the founder, CEO, and broker for the Houston Real Estate Group, and having been in the business for more than 20 years, she says she’s seen it all. She says the subprime crisis came with offers that were too good to be true.
“The problem is that people were trying to get into homes for nothing. No money down. But if you really think about it, whether it’s a house or a car, if you put some of your own money into it, you’re more likely to take care of it as opposed to if it didn’t cost you anything,” says Vaca, who agrees with the notion that while Hispanics were unnecessarily pushed into risky loan commitments.

Consumers really have to educate themselves, and Vaca knows the importance on informing them. Vaca does so by running a full service real estate and mortgage company that also provides seminars for people looking for information on how to buy a home.

“Latino customers who are coming into buy, they’re just scared that it’s just not the time for them to buy. Or they’re scared that they’re not going to qualify for a loan.” Vaca adds that at the end of the day, if you’re making the biggest purchase of your life, you need to put in the time to get everything answered up front.

“If they don’t understand the language, find a realtor, mortgage or loan officer that speaks your language,” says Vaca. “There needs to be more of these (community assistance programs) centers. Especially for Spanish-speaking people, I know in the Anglo community, there is a tremendous amount of these seminars and workshops.”

But according to U.S. Treasurer Cabral, it’s never too early to get educated on the basics, even if you’re years away from looking at the real estate section of the newspaper. “Clearly we have a lot of kids in high school not understanding how to balance a budget, not knowing how to manage their credit cards,” says Cabral. “We’ve got too many young people who don’t even sign up for their 401K, leaving an employer’s match on the table, and not preparing for retirement.”

For Zulema Esparza, going to homebuyers seminar was a great investment of her time. At her afternoon workshop, there were realtors, bankers, as well as a representative from a community assistance agency. She too has heard stories about Hispanics being unfairly targeted for loans they couldn’t afford. Esparza has this advice for Latinas who are thinking about buying a home and don’t know where to start.

Go to a company that is going to target you, but in a positive way. The one I went to targeted minorities. They had Spanish-speaking people and that was one of the reasons I went to them,” says Esparza, who finalized the deal on her first home last June. “They highlighted the fact that they spoke Spanish and that made me feel welcomed and made me feel safe that I wouldn’t be taken advantage of.”

Esparza says that while owning a home comes with never-ending issues and repairs, she is thrilled to be the queen of her suburban “castle”; a four bedroom, two bath ranch style house complete with a two car garage and big backyard that holds a swimming pool. “It’s something so positive because I have something new to come home to,” says Esparza. “To think what I’m going to add next. It’s always nice to have something that’s going to keep growing with me.”

For more information visit the following available helpful resources links:

HOPE NOW
888-995-HOPE
www.hopenow.com

Federal Housing Administration (FHA) www.fha.gov

U.S. Housing and Urban Development
www.hud.gov

ACORN
www.acornhousing.org

By Yolanda Perdomo