At the time, Jackie didn’t know much about “predatory lending,” but that changed a few months later when she visited an electronics store near Kings Plaza and met a sales manager named Geraldo Nieves. He became her boyfriend—and, eventually, the father of her child—and after he heard her home-buying tale, his analysis of the situation was simple: “Babe, that’s predatory lending.” An avid reader of the Daily News and the Times, he had been tracking the foreclosure crisis. Soon she was, too. “The more I watch TV, the more I’m hearing about predatory lending, the more I’m realizing I am a victim also,” she says.
In March 2008, an envelope arrived that looked like junk mail. Jackie opened it anyway. Inside, she discovered a flyer with a picture of her home and an auction date: April 4. “What the hell is going on?!” she said. She was seized by a sense of panic, a physical response she later described as “worse than a heart attack.” As it turned out, the letter was from a foreclosure “rescue” company trying to sell her their services. (“This is the last opportunity you may have to stop the sale.”) But until she’d opened the envelope, she had no idea she was two weeks away from losing her home.
Long Beach Mortgage Company had started foreclosure proceedings against her the prior year, and, as required, had sent a process server to deliver the paperwork. But Jackie says she never received it—or any other foreclosure notices. She suspects the papers went to her tenant or to the wrong residence altogether. (On some property records, her address is mistakenly listed as Beach 71st Street.) Even without formal notification, however, she shouldn’t have been too surprised to learn she was at risk of foreclosure; after all, she had fallen behind on her mortgage payments after six months.
To stop the sale of her house, she filed for bankruptcy. Then she contacted the servicer of her mortgage and managed to obtain a trial loan modification. If she paid $3,575 a month for the next six months, the servicer would lower her interest rate and waive her late fees, or at least that’s what she recalls being told. To generate income, she devised a last-gasp plan: Rent out the first and second floors of her house—and move into the basement. She found tenants through a city homeless program; with the city picking up most of the tab, she figured she’d get the rent on time.
Soon two formerly homeless families were living on top of her—in quarters far sunnier and more spacious than her own. She, her boyfriend, and their 4-month-old baby shared a cramped, dark space in the basement. They slept together in a tiny bedroom and used the remaining room as a kitchen, dining room, living room, and laundry. The dryer sat next to the stove; the vacuum lived in the bathroom. The ceiling was so low her boyfriend couldn’t make it to the bathroom without smashing his head on an overhead light.
“You know what’s really ironic? We have foreclosure counselors who have mortgages. Now they’re in trouble too.”
It was a dismal setup, but it did make Jackie’s mortgage more manageable. For seven months, she made every payment. But when the trial period ended in early 2009, she got some bad news: Her loan had been assigned to another servicer—and now that servicer refused to honor her agreement. She had to pay all her arrears or else lose her home. “At that point in time, the anger inside of me rose,” she says. “And I said to myself, ‘You know what, God? I’m not going to take this nonsense anymore.’ ”
She gathered her documents, slung her briefcase over her shoulder, and headed off to State Supreme Court in Jamaica. There, a clerk informed her that there was already a foreclosure action pending against her. Like many homeowners, she’d mistakenly believed that by entering into a trial loan modification, she had dismissed her foreclosure action. But that hadn’t happened. “It’s in foreclosure,” the clerk said. “It’s just waiting to be sold.”
She was in even deeper trouble than she’d thought. Too much time had passed for her to be able to defend herself in court. Her only hope was a long shot: somehow persuade a judge to give her another chance. She got a form for an order to show cause and filled in the blanks by hand: “I AM A VICTIM OF PREDITORY LENDING AND WOULD LIKE THE CHANCE TO PROVE MY CASE. I HAVE DONE EVERYTHING TO SAVE MY HOUSE, AND HAVE INVESTED MY SAVINGS INTO IT … PLEASE, PLEASE, PLEASE DO NOT ALLOW THEM TO TAKE MY HOME FROM ME. I DO NOT WANT TO END UP IN THE STREETS WITH MY NEW BABY.”