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| Bitten
by a Loan Shark |
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| Patricia
Nesbitt was paying off a $47,000 loan, when
fraudulent lenders tripled her debt |
| by
Adam Holdorf |
Patricia Nesbitt is a 62-year-old Af-rican
American woman living on disability income.
Her grandmother bought her house on 20th Avenue,
in the Central District, in 1969. Because
of some debts her grandfather accrued through
repair costs, the City of Seattle put a $42,000
lien on her home. Patricia consolidated her
debts and got a home equity loan from Beneficial
Mortgage Company in January 1997. At the time,
Beneficial wrongfully reported it as a refinance
to the Department of Housing and Urban Development
- a tactic that could help them get more federal
assistance for making such loans, and so it
could be sold to other financial companies.
"When that happens, you don't have $50 to
see a lawyer about those papers. Some people
do, but I didn't."
When Beneficial was about to increase her
monthly bills in September 1997, she refinanced
and the loan was sold from Beneficial to Pacific
Thrift and Loan Company. "Beneficial claimed
they were getting ready to be sued, and that
if I didn't pay my loan in full, then I would
have to refinance because they were getting
ready to sell the company - which they didn't,
they lied. These are the methods they use
when they want people to involuntarily refinance.
If I didn't refinance with them, they said
I would have to pay the loan in full. Just
like the Mafia, they made me an offer I couldn't
refuse."
On October 1st, 1997, she got a phone call
from a new mortgage company, Pacific Thrift,
informing her they were her new lender.
"Two months later, a woman called me from
Pacific Thrift. She said, 'You're in for a
hard time here. I'm getting ready to quit
because this company is so crooked, but I
saved one page of your loan application from
the paper shredder. I'll send it to you.'"
It showed information altered by the loan
officer, putting Patricia's monthly income
$1,700 higher than what she really earned.
Patricia says her signature had been pasted
onto the page and photocopied.
Those documents had been submitted to Advanta
Mortgage Company, who then bought the loan.
To find out more, Patricia impersonated an
interested customer and purchased her own
financial records from Advanta.
"I called up and said 'I'm interested in acquiring
a loan, my friend Patricia has one. Can I
see her loan information?' and they sold me
my information, Social Security Number, everything,
for $35," she says. The documents revealed
that the terms of her payment had been changed
after she signed it: the loan officer added
tens of thousands of dollars in fees for illegal
certifications that were never done. Her principal
went from $80,000 to $109,000, and her total
monthly payments climbed to $1,000. Then her
son was diagnosed with leukemia.
"I had the choice, do I help pay his medical
bills, or do I pay my mortgage? My daughters
and sisters pulled together with me on this,
to keep from becoming homeless," she says.
But when she could no longer keep up earlier
this year, Advanta threatened foreclosure.
Late last month, the Association of Community
Organization for Reform Now (ACORN), with
the support of other community groups, marched
on the law offices of Karen Gibbon to protest
the foreclosure. Negotiations with Advanta
have paid off: they reached a settlement,
and Patricia will refinance with Cascade Bank,
on good terms.
While Advanta's bad press might have helped
her out, "I'm not going away. We need some
laws to cover the loan company's practices.
"I'm one of those people that believes that
if you are honest, then other people will
be honest too," she says, "and I had no idea
these people would do this.
"You talk to educated people, they say, 'Well
how could they do that?' Easy! They can change
your life by altering things behind your back.
You can sign one agreement, and they won't
show you what it really says. You tell a judge
you signed one part but never saw this particular
sheet. Then the next time you see that paper,
it's totally different. How do you prove that?"
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