Akron City Council to Crack Down on Predatory Lending
Posted: 03/21/2007
Akron City Council CityScape, Winter 2007
Akron City Council is forming a special task force to address predatory lending practices that are leaving city residents virtually homeless and without much recourse after losing in courts to mortgage lenders.
Three years ago, Council passed a resolution urging the Ohio General Assembly to tighten restrictions on predatory lending, and Gov. Bob Taft in June signed into law legislation to block predatory lending in the state. But, the recent experiences of some Akron residents lead City Council to think that more needs to be done locally to educate and empower Akron homeowners, said 5th Ward Councilman Jim Shealey.
“The new Predatory Lending Task Force will involve members of Council’s Housing Committee and Council leadership, as well as community leaders,” Shealey said. “We are especially grateful to have a housing advocate like Lolita Adair as the chair of this task force.
“Mrs. Adair has fought tirelessly for years to arm Akron home owners with the tools they need to avoid losing their homes to foreclosure.”
Adair is an Akron real estate agent who has, on her own, built pages upon pages of case files from clients and others who have sought her assistance in potential foreclosure situations resulting from predatory lending. She is hopeful that some real lending reform can take place now that she has the muscle of Council behind her.
“Three years ago I asked Council to look into predatory lending because we had an elephant in the room and nobody was talking about it,” Adair said. “It’s not going to be an overnight solution, but I hope the city of Akron will become a model for how all lending should be done in this country.”
Adair said some of the committee’s most immediate goals include establishing legislation that tightens restrictions on mortgage brokers; closer review of the process to license appraisers – some of whom are guilty of falsely valuing property at more than its true worth; identifying the mortgage companies that are buying so many loans that end up in foreclosure; and working with law enforcement authorities to act on behalf of consumers’ complaints in addition to civil actions.
“I’m hoping this committee will work cooperatively with local prosecutors, law enforcement and perhaps the federal authorities,” Adair said. “I’m also working on a brochure to be distributed to the citizens of Akron to arm them with the information they need to keep them from being duped into purchasing a property which may very well result in them having to look to bankruptcy as a relief.”
William Rich of the University of Akron School of Law is one who has so far committed to serve on the task force, Shealey said. Ward 9 Councilman and Housing Committee Chair Mike Freeman, Sulaiman Zahir of the Social Security Administration, Robert Hamilton of Hamilton Appraisal Service, James Stein of The Minnesota Title Co. and Elaine Davison the city Law Department are some who have also signed on to serve on the task force.
Shealey said homeowners in and near his ward contacted him for assistance after all other options failed them. By the time they reached him, however, it was too late: They were already ordered to turn their homes over to the banks that held their mortgages.
“It’s time that we as Council take some formal steps toward addressing this epidemic of bad lending practices which undoubtedly contributed to this area’s embarrassingly high number of home foreclosures,” Shealey said. “Our constituents are looking to us as their elected representatives to stand up for them against some of these mortgage lenders who seem to have been given a free pass to swindle hard-working people out of their savings, their homes and their very livelihoods.”
One resident who contacted Shealey is John Sabini. The 65-year-old blind Akron man, his ill wife and their adopted 7-year-old son were given a 10-day notice to vacate their Firestone Park home by sheriff’s deputies in early December, a month after a judge ruled in favor of Wells Fargo Home Mortgage’s request to seize his home for lack of payment.
John Sabini said he missed a payment while he was hospitalized for a month about three years ago, and found a delinquent notice awaiting him when he returned home from the hospital. The Babcock and Wilcox retiree quickly notified the bank he would be mailing a double payment, but said the bank told him it may not accept it, as foreclosure proceedings had already begun.
“They (Wells Fargo) stalled me for 30 days, and on the 31st day, my lawyer called me and said ‘we tried to get the bank to work with you, but it’s too late. They’re taking your house because you have a lot of equity’,” Sabini said. “They didn’t have to show the court any proof of late payments; they just said there were $20,000 in penalties and late fees.”
Councilman Shealey said Sabini’s story is similar to that of Terri Riggins, the 77-year-old woman who also recently lost her home to foreclosure, and was forced to sleep in her car for lack of anywhere else to go. Oddly, he said, Riggins lived in the same neighborhood as Sabini.
“It’s no coincidence that these events took place in low-income, working-class neighborhoods whose victims were poor, elderly and or disabled,” Shealey said. “The courts tend to rule in favor of the banks and against the people. We as local legislators have to stand up for the people.”
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