No one in the Rev. Tony Brooks’ family had ever had a home built for him. So when the finishing touches were put on his $75,000 Columbia City ranch house in 1988, he was making history. Remembering the night when he first slept under his own roof, he smiles. “That was the most awesome feeling— being of African-American descent, feeling you could leave a heritage and legacy to your family,” says Brooks.

But then things went awry.

Aiming for financial stability, he refinanced his home in 1997. Around the same time, he remarried, but the marriage ended in divorce in 2000. Financial woes mounted. The home went into default. To catch up, he took out a subprime loan. The loan agent, says Brooks, told him the agency would consolidate his debt, promising a lower monthly rate while paying off all his bills. But Brooks says the agent didn’t fully explain that, unlike his previous mortgage, his new payments would not include taxes, insurance, and escrow payments. The new loan raised his monthly payments from $1,400 to $2,500.

He struggled to meet the newly-inflated costs. A lawyer suggested he file for Chapter 13 bankruptcy. Self-employed as a barber and unable to meet this bankruptcy payment plan, Brooks filed another Chapter 13 plan on the advice of a new lender. A barbershop client suggested that Brooks speak to a realtor for help. The realtor advised a Chapter 7 bankruptcy. The Reverend filed for bankruptcy a third time.

The house was put on the market, but soon after, went into foreclosure. More than six months later, the house was sold. But the buyer abandoned the sale when the realtor sat on the paper work. “And after that,” says Brooks, seated in a barber’s chair at his Rainier Avenue barbershop, “ I lost my home.”

And with it, his family’s legacy was lost as well.

The tale of woe that befell Brooks is a common one across the U.S. as foreclosures remain at high levels, according to statistics from the online foreclosure resource Realty Trac. Compiled by the Association of Community Organization for Reform Now (ACORN), they show that in April mortgage companies filed 493 foreclosures against homeowners who were behind on their payments in King County. In April 2006, 504 foreclosure notices were filed. Of the 10 zip codes with the highest number of homeowners who faced foreclosure in April 2007, eight were located in south King County.

The high level of foreclosures was largely the result of subprime loans, says Nancy Wagner, an ACORN member. Broadly defined as a loan that’s offered at rates above prime to borrowers who don’t qualify for prime rates due to low credit ratings, she says that lenders target certain communities.

This sentiment was echoed by John R. Jones, Jr., who serves as ACORN’s Washington state president. Fresh from a June 20 meeting with Federal Reserve Chairman Ben Bernanke in Washington, D.C.—where three dozen national ACORN members urged stronger loan oversight to limit foreclosures—Jones says that certain lenders make loans to borrowers they know cannot and will not be able to afford them. “We’re losing our communities to the subprime lenders,” Jones says. “And now we’re losing our homes.”

During the meeting with Bernanke, Jones says that ACORN suggested a national home-ownership protection model based upon a new Minnesota law. That law, he says, will require that all mortgage loans include, in their packages, taxes and insurance and escrow payments. With 75 percent of subprime loans offering adjustable rates that usually increase within two years, and 80 percent of those same loans carrying pre-penalty payments, he says the federal government should prohibit the loans outright. Such a scenario, he indicates, may have helped Brooks.

“Rev. Brooks was a casualty of a lender who gave the illusion of being someone who was out to help,” Jones declares. “And he was out to help, but not Pastor Brooks. He was out to help himself.”

Brooks, a Baptist minister, now lives in a low-income one-bedroom apartment in Rainier Beach. Having recently been fully ordained as a minister, he says what he’s experienced helps him on the pulpit, making him a more passionate minister. “What’s happening in our community today is that there are a lot of people struggling, a lot of people don’t know their rights,” he says, “especially when it comes to real estate. And because of the lack of knowledge, we’re perishing.”

[Resource]
ACORN offers assistance to those facing foreclosure through its website: www.acorn.org or through its foreclosure hotline: 1 (866)-67-ACORN.