Clifton Beckley, who served his country honorably as a member of an artillery battalion during the Vietnam War, has lived on Maple Avenue with his family in Irvington in Essex County, New Jersey since 1992. Clifton Beckley is now facing an impending loss of his family home to HSBC Bank after a legal battle in which over 1,655 of his fellow Irvington residents have actually petitioned the CEO of HSBC Bank for mercy and fair treatment on Clifton’s behalf.
In 1992, Clifton Beckley purchased his Irvington home using a VA loan guaranteed by the U.S. Department of Veteran Affairs. VA loans help those that have served in our armed forces and who lack the funds to get a traditional loan product and allow them to purchase a home with no down payment. For more than two decades, Clifton has worked at Home Depot and has supported his family by making a modest wage and paying his mortgage on time.
In 2006, a mortgage broker from Allied Mortgage told Clifton that his home was worth over $300,000, more than three times what he paid for it, and talked him into re-financing. The re-financing was based on and underwritten subject to a bank-issued appraisal which valued the house at over $316,000. The new loan had a variable interest rate and other predatory characteristics that did not fit Clifton Beckley’s customer lending profile or his income level.
Clifton Beckley was urged to take the loan and reassured by Allied representatives that the loan would be affordable because he was “sitting on a goldmine.” Upon re-financing, Clifton’s payments skyrocketed to over $2,600 a month and quickly became a challenge. The new loan stripped all of the equity from the home without paying down the principal, and ostensibly increased the loan balance. Clifton exhausted his 401(k), incurring steep financial penalties, to try to stay current with his mortgage.
In 2011, after the housing crisis had erased the equity he had in his home, Clifton was left with the higher payment and no equity. He was also hospitalized for over two months for a recurrence of his PSTD brought on by stress. This event left him permanently disabled and unfit for work. During this time, out of work, and without a steady income, Clifton Beckley was left unable to pay his mortgage and finally defaulted. Today, Clifton Beckley is still unable to work due to this PSTD and receives disability. HSBC, having stripped Clifton of the equity he once had in his home, now intends to foreclose and take back the property.
A foreclosure action, filed April 2, 2014, is pending under Docket No.: F-12694-14, before the Presiding Judge of the Chancery Division, Walter Koprowski, Jr. HSBC bank is represented by its attorneys Fein, Such & Kahn, PC. Clifton Beckley is represented by Michelle Joy Munsat, Esq. HSBC filed a Summary Judgment motion in November to take back the property, and the lawsuit is apparently pending disposition in the bank’s favor by way of a Consent Order entered into last week on March 3rd, 2015.
Clifton Beckley writes on his webpage that there are about 30 vacant homes in a three (3) block radius of his home, due to the fact that banks came in and convinced these homeowners to enter into predatory loans that depleted the equity in their properties, and the banks have since swooped in to foreclose and reclaim these properties.
HSBC, like most banks, wants to recover a judgment for the full $300,000 from the re-financed mortgage, plus all of the arrears and accrued fees, and to take back the property to satisfy its debt in full. According to Zillow.com, the house is now worth only about $200,000. However, HSBC has reportedly not offered a settlement where the arrears and part of the principal would be forgiven, in order to more closely reflect the actual value of the property – which is all HSBC can recover in a foreclosure action. Instead, HSBC’s servicer, PHH, has reportedly given Clifton Beckley the run-around for years on loan modification applications that have gone nowhere.
Irvington residents have rallied behind Clifton Beckley and more than 1,655 local residents have signed an online petition to HSBC CEO Stuart Gulliver, urging him to provide a deal whereby Clifton Beckley can get a modified loan, with the principal for that modified loan tied to the actual property value, not inflated 2006 bank determined property values that were imaginary to begin with.
To put matters into even sharper focus, it is important to take a look at the demographics of Irvington. As reported by Joseph Tyrell of NJ Spotlight:
"A blue-collar, largely African-American and immigrant community between Newark and Maplewood, Irvington was hard hit by the recession and the bursting of the housing bubble. Like some other urban areas, the twonship has had a chronically high crime rate, often four times the state average, but also many streets of tidy middelclass homes.
RealtyTrac reported rougly 88,000 completed foreclosures in New Jersey in 2008-2012. Few places were hit harder in that period than Irvington with 1,775, almost 9 percent of households listed in the 2010 Census.
Besides overheated prices and unregulated banking, Irvington offers another piece of a profile of areas that have suffered the most: gullible buyers, often working-class and minorities with little previous borrowing experience." (Emphasis added).
Joseph Tyrell's review of the statistics is worth reading. He cites data from the National Mortgage Settlement indicating that of the $26 billion paid by the five major banks to settle mortgage fraud claims, of the 171,663 homes modified through thte program, the settlement monitor's office did not list a single Irvington home as receiving a modification through the settlement. Making matters worse, Joseph Tyrell reports that in a recent urban renewal prgoram leading to the acquisition of 199 mortgages in Irvington -- of those purchased -- 124 of the 199 homeowners were paying mortgages with at least 10% interest, with half of the homeowners paying interest rates between 15% and 20%.
Irvington is an exmaple of how poor, uninformed, working class individuals and minorities --- first time homebuyers --- the exact group measures to increase homeownership were ultimately meant to serve, have instead been hardest hit and often looked over and denied meaningful relief.
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