BZH getting poked
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Lost homes haunt families
107 homes. 41 foreclosures. An ongoing crisis in Barrington ruins finances, credit and lives.
PAM KELLEY
pkelley@charlotteobserver.com
DANA ROMANOFF / Observer Staff
Former Barrington residents, from left, Vicki Bembry, Agina Anderson and her boyfriend Antiley Williams with his daughter Annyia Williams, 8, and her son, Michael Wall, 6, and Chris and Tasha Pagoota lost their homes to foreclosure.
* Video | Agina Anderson's story
* Detailed Map | Foreclosures in Barrington
* Interactive Map | Mecklenburg foreclosures
* Archive | Sold a Nightmare
HOW YOU CAN GET HELP
If you're a homeowner behind on mortgage payments or facing foreclosure, here are some places to call for information or help:
Contact the company that services your loan as soon as possible. It may be willing to adjust your payments.
You can also contact a counseling agency, which can work with the lender on your behalf. In Charlotte, United Family Services offers counseling at 704-332-9034. Outside Charlotte, you can find a local agency by calling the U.S. Department of Housing and Urban Development at 800-569-4287 or online at www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm.
You can also call a national nonprofit, the Home Ownership Preservation Foundation, at 888-995-4673.
Advice from homeowners:
Agina Anderson: Read loan and sales documents and make sure you understand them. "I didn't read my stuff." Take a home ownership class. "They tell you everything you need to know."
Vicki Bembry: Have enough savings for at least three or four mortgage payments in case you encounter financial problems. "And if you're single, with one income, living check to check, don't do it."
Chris and Tasha Pagoota: Make sure the interest rate is fixed and that you know what your monthly payments will be before making a down payment. And, Tasha says, "If you feel like it's not right, it's probably not."
Agina Anderson's foreclosure dogs her.
When she tried to rent a house, it warned companies not to take a chance on her. When she sought a car loan, it forced her to pay 19 percent interest.
She'd like to buy another house, but the foreclosure weighs down her credit score like an anchor.
Anderson lost her home in Charlotte's Barrington neighborhood in November 2003.
She's one of 41 original homeowners who've defaulted, creating a club of foreclosed neighbors that no one wanted to join.
Barrington was to be their shot at home ownership. Instead, it was the mistake that upended their lives.
With nowhere else to go, some moved in with relatives. Some settled for rentals with landlords who would overlook bad credit. Many still have debt they amassed as they neglected bills to try to pay mortgages.
Barrington consists of 107 starter homes built by Beazer Homes USA off Sunset Road West in northwest Charlotte. Most were priced from the $90,000s to $130,000s.
Nationally, less than 3 percent of home sales result in foreclosure. Barrington's rate is 38 percent, one of Mecklenburg County's highest, public records show.
Beazer arranged mortgages for 37 of the 41 homeowners who lost their homes.
Many qualified with shaky credit and no savings. At least two, including Anderson, had never rented a house or owned a car.
Some say they didn't understand the documents they signed. They didn't realize they were getting loans with interest rates that would rise after the first and second year.
Several now realize they had no business buying a house. "You can't move into a house already living check to check," said one single mother who asked not to be named.
But many Barrington buyers took the plunge anyway. They assumed they wouldn't have qualified if they hadn't been able to afford the payments.
Beazer declined comment Friday through its attorney, Ken Bell, who cited pending litigation against the company.
Sales end, foreclosures begin
Beazer sold its last Barrington house in November 2002. The first foreclosure came a month later.Anderson's home was the second, in November 2003. Anderson was a 19-year-old single mother making $8.05 an hour at a gas station when she got her loan in 2002. "I didn't have a car. I didn't have nothing. I just came straight out of my mom's house," she recalled.
Shortly after moving in, she got pregnant with her second child, became ill and quit work, she says. With eviction looming, she sold her television to get money to rent a moving truck, then moved in temporarily with her boyfriend's mother.
Before she finally found a welcoming landlord, she and her son Michael, then a toddler, spent about a week in a homeless shelter and several months in a motel. "Nobody wanted to rent to me because I had the foreclosure on my credit," she said.
A credit score is a number that represents the likelihood that you'll repay a loan. It's the most important factor in determining the interest rate you'll pay to borrow money. Increasingly, it can affect what you pay for insurance, whether a landlord will rent to you and even whether an employer will hire you. A foreclosure lowers your score, usually dramatically, and stays on your record for seven years.
Since Anderson left, Barrington has averaged nearly one foreclosure per month. Neighbors have learned to recognize the signs. A U-Haul pulls into a driveway, and the next day the house is empty. The lawn grows tall. The garbage is no longer rolled to the curb each week.
Two of Vicki Bembry's brothers were living with her when she was evicted on a summer morning in 2004. Both were home when a sheriff's deputy arrived and instructed them to collect their things and get out.
With the help of Crisis Assistance Ministry, she moved to a $350-a-month apartment off Beatties Ford Road. She recalls green mold that bloomed on the carpet and up the walls, but at that point, she was grateful.
Losing her job hastened her foreclosure, but Bembry says she had fallen behind on payments even before being laid off. Her mortgage started at $712 a month and ate up about a third of her pre-tax wages. After two years, payments were more than $900, she recalls.
"It was pitiful. I shouldn't have gotten a house," she says now.
Falling behind every month
Former Barrington residents Chris and Tasha Pagoota now keep a list of monthly bills thumb-tacked to the bedroom wall and check them off as they pay. To make sure they stay current on rent, they pay on their China Grove house in two-week installments, when Chris gets his paycheck from his job as a delivery driver.
The two were newlyweds in 2001 when they bought in Barrington. They were 19 and 18, two months out of high school and 10 days married. Chris carried his bride over the threshold.
Chris says he told the Beazer agent up front that they couldn't afford more than $500 or $600 a month. When he learned payments would start at around $700, he says, he worried, but remembers the agent assured him he could sell or refinance in a couple of years.
They went forward with the home purchase for fear of losing their $500 down payment, Chris says.
They realize now, they say, that the mortgage payment was too high. And they blame themselves for making ill-considered purchases from door-to-door salespeople, including a pricey vacuum cleaner and a water treatment system.
"If you added up what we made and our bills, we were $200 behind every month," Tasha recalls.
They tried fruitlessly to sell. In late 2004, the loan's rising interest rate plus late fees had pushed their monthly payments to about $1,000, the Pagootas say.
At that point, they knew it was over. "We just stopped making payments," he says. They sold one car so they could make a deposit on the rental house.
Their home was one of 10 Barrington foreclosures in 2004. There were 15 in 2005 and seven more in 2006.
Foreclosing to escape
Most homeowners lose their homes to foreclosure because of financial difficulties. But Rosa White saw foreclosure as her only way out of Barrington.She worried about crime, including a stabbing on her street, and wanted a better neighborhood for her daughter. Her house stayed on the market a year -- 30 showings and not a single offer, she says.
About a year ago, she bought a second house in Indian Trail and left Barrington. For a while, she paid two mortgages. Finally, "I stopped paying the mortgage and said the heck with it," she says.
Knowing her credit would be ruined, she prepared by buying a car and getting a couple of credit cards for emergencies. She doesn't plan to buy anything else on credit for a long time.
The foreclosure sale came in April.
And foreclosures keep coming. Days after White's foreclosure, a portable storage unit appeared in a Barrington driveway.
The homeowners, a couple who asked not to be named, rented it after they got their foreclosure hearing notice. They had already moved in with relatives and feared they would be locked out when the eviction came. So they emptied their house and filled the storage unit -- with boxes, an aquarium kit, a vacuum cleaner, umbrellas. Two children's bicycles were among the last items packed.
On May 9, their house was sold back to the mortgage company. After being rejected by some rental companies, they recently found a house to rent.
On May 11, another foreclosed house was sold.
On May 25, a sheriff's deputy left another foreclosure notice at a house. It was already empty.
Trying to recover
The Pagootas still don't have a second car. They rely on Chris' 10-year-old Ford Ranger, which he repairs. He works extra hours to make ends meet.
Agina Anderson now works as a caregiver for elderly clients and has taken a home ownership class. She has been turned down twice for mortgages. She's working to pay off old debts and checks her credit score twice a year. As it improves, she hopes eventually to buy another house.
Vicki Bembry doubts she'll ever have another house, "unless I win the lottery or something." Without a yard, she grows vegetables and flowers in pots outside her apartment door.
Occasionally, she drives through her old neighborhood. Some homes remain neat, with well-tended yards, but most are located near a vacant house with an overgrown lawn. About a dozen neighbors are trying to sell. Many have discovered they can't get enough to pay off their mortgages.
Barrington "set people up to believe they could have this fantasy white picket fence thing," Bembry says.
When she considers many of the people who bought in Barrington -- homeowners like her with limited income and no savings, "I think that neighborhood was doomed from the beginning."
Another foreclosure hearing is scheduled this month. It would be Barrington's 42nd foreclosure.
-- Staff writer Binyamin Appelbaum and researcher Maria Wygand contributed.
Pam Kelley: 704-358-5271
Foreclosures Grow
Home foreclosures in Mecklenburg County reached a record high last year and the number of foreclosure filings has continued to climb through May 2007. The foreclosures are concentrated in starter-home developments such as Barrington, where homes were sold for average prices below $150,000, according to an Observer analysis.The Observer has identified at least 35 starter-home developments in the county where 20 percent or more of the homes have foreclosed. Beazer Homes USA built nine, more than any other company. Beazer also built one development with prices above $150,000 where 20 percent or more of the homes foreclosed.
An Observer investigation found that Beazer's aggressive sales tactics contributed to an unusually high foreclosure rate in many of its Charlotte-area starter-home developments.
Beazer arranged loans for most of its buyers. Some buyers received larger loans than they could afford. That allowed the company to include the cost of financial incentives in the price of homes. As a result, people who couldn't afford their monthly mortgage payments often found they also couldn't sell the homes for enough money to cover the loans.
Almost all of Beazer's loans were insured by the federal government, which failed to notice the problems.
In response to the series, the FBI and other federal agencies launched a criminal investigation of Beazer.
The company's board of directors also announced that it would investigate Beazer's mortgage practices. Beazer has said it followed all laws and regulations, and that it {quot}has a long established commitment to managing and conducting business in an honest, ethical and lawful manner.{quot} In SOLD A NIGHTMARE
a four-part series published in March, the Observer found Beazer Homes USA sometimes crossed the line between selling to people who could barely afford homes and selling to people who couldn't. Ten Beazer developments in Mecklenburg, including Barrington, have foreclosure rates of 20 percent or higher. In response to the series, the FBI and other federal agencies launched a criminal investigation of Beazer. This story examines what happens to people after their homes are foreclosed.
Why Make a Loan That's Likely to Fail?
Former Barrington homeowners Tasha and Chris Pagoota worried from the start that they couldn't afford their mortgage. But they went forward anyway, reasoning, Tasha says, "They're not going to put us in something we can't afford."
That once was a safe assumption.
Until the 1980s, mortgage loans mostly were made by local savings & loans. If the homeowner defaulted, the S&L lost money. That motivated lenders not to saddle customers with loans they couldn't afford.
But that caution disappeared in the 1990s. Government officials relaxed loan qualifying standards so more people could become homeowners. The old role of the S&Ls has been split into three parts. Loans are mostly arranged by independent mortgage brokers, funded by national companies and sold to investors.
The brokers and the lenders are paid upfront. Each loan is divided among many investors, so they also lose relatively little from each default.
"The only person who really gets hurt in this at the end of the day is the borrower who couldn't afford the loan," says Chris Kukla, with the Center for Responsible Lending in Durham.
-- pam Kell |
