Safe at home
A church, a congressman and a crusading mortgage broker team up to save an octogenarian Altadena widow’s home from foreclosure
By Joe Piasecki 07/29/2010
A victim of predatory mortgage lending whose home was slipping into foreclosure, 80-year-old Claudia Turrentine appeared on the cover of this newspaper 15 months ago to embody the mortgage crisis’s disastrous impact on senior citizens.
But that was only the start of her story.
Today, Turrentine is once again secure in the home where she raised her children — all thanks to a tireless grassroots effort involving a congressional letter of inquiry by Rep. Adam Schiff, an outpouring of support from her church and a personal appeal to her bank led by, of all people, a sympathetic mortgage broker.
By the time Malcolm McLean found Turrentine, the Altadena widow was nearly a year behind in mortgage payments that after several dubious sub-prime refinance deals had ballooned to nearly three times her monthly Social Security income.
“I had been talking all week to people in Pasadena and Altadena who were being evicted, and when I came across Claudia her story made me angry, and then it made me determined,” said McLean, who operates First Reverse Funding (yes4reverse.com).
McLean specializes in reverse mortgages — a type of loan that allows seniors to draw tax-free income from their home equity instead of making monthly payments.
But closing such a deal for Turrentine, a devout congregate of the Pasadena-based Deliverance Tabernacle Church of God in Christ, hardly stood a prayer. Declining housing prices and five-figure transaction fee debts had drained her home equity $90,000 short of qualifying.
With a foreclosure date at one point just days away, McLean and Turrentine said one deal-hunter offered her money to vacate the property so he wouldn’t have to order her eviction.
Having learned of Turrentine’s plight in the Pasadena Weekly, however, church leaders were poised to help, and under McLean’s direction put up a $40,000 offer to Wachovia (which inherited the loans of defunct World Savings Bank) if it would reduce the balance of Turrentine’s loan enough for her to qualify.
McLean’s appeal to the bank’s national leadership, meanwhile, was bolstered by pressure from Schiff, who sent Wachovia a congressional letter of inquiry about Turrentine’s plight and why anyone would saddle a senior living on $950 per month with payments as high as $2,400.
An answer came in the form of an approval for Turrentine.
“I shed tears of joy when I knew it was over. I’ll be here ‘til God takes me on to Glory Land,” she said.
Schiff, who supported last week’s passage of financial reform legislation that will increase oversight and consumer protection, encouraged local homeowners at risk of foreclosure to contact his office.
“Shedding a spotlight sometimes on what a bank is doing or calling a case to their attention when they’re inundated with cases can help. We can’t compel them — they’re private institutions, it’s a private contract — but we can make sure they don’t act in an arbitrary way, and sometimes we succeed,” said Schiff.
“This is one of the success stories, but a lot of them don’t end up this way,” he said.
Coy Turrentine, Claudia’s brother-in-law and a pastor with Deliverance Tabernacle, said it was Turrentine’s devotion to the church that inspired it to give.
“She’s never asked for anything from the church and has been a loyal member all those years. Because of our love for Claudia, the church found it necessary to do what they did,” he said.
Schiff praised the July 21 passage of Wall Street reform legislation as establishing greater oversight of financial transactions both system-wide and individual levels.
“The new consumer agency will in particular try to safeguard consumers so they’re not subject to predatory loans and so that there’s better information when people finance or refinance,” Schiff said.
Meanwhile, “The transactions that were at the heart of the debacle — these collateralized debt obligations, derivatives trading — will now be more transparent,” he said. “A lot of where the rubber hits the road is going to be in the regulatory process. We’re going to have to ride shotgun on that, but I think it’s a very positive step.”
Though media coverage cautions that reverse mortgages require as much careful consideration as any other type of mortgage, McLean encourages senior homeowners in dire straits to consider these loans, which need only be repaid after the mortgage holder dies or the property is sold.
“Senior homeowners are at the biggest risk for foreclosures and evictions because they have no way out of fixed incomes. If they made the mistake of refinancing their home at the top of the bubbles, they’ve probably spent all that money and the surviving spouse just cannot handle the payments. And because home prices devalued, they have very little or no equity left,” said McLean.
“That’s really the story of Claudia. They had almost paid off that home, her husband passed away, she got sick, and in the mix she was contacted by a mortgage broker [who profited from hefty transaction fees],” he said.
“She was an easy target.”
To read Joe Piasecki’s award-winning story on the plight of Claudia Turrentine, click on http://www.pasadenaweekly.com/cms/story/detail/crisis_comes_home/7168/