Hispanics especially vulnerable in Las Vegas housing crisis
Armando Cortinas and his wife, Beatrice, spent much of the past few months living in their backyard, after a bank foreclosed on their home and changed their locks. They are fighting the eviction in court. Here, Armando reads a newspaper article to his granddaughter Angie, 8.
Beatrice Cortinas washes the dinner dishes by lamplight. For many weeks, the Cortinas family camped in their backyard after a bank foreclosed on their home and changed the locks.
Moises Leyva, a school custodian, bought a modest home during the housing boom for $237,000. Today, it is worth just $83,000 and he is fighting a foreclosure action by his lender, Wells Fargo.
Mr. Leyva gets ready to leave for work. Home values in Las Vegas have fallen by 65 percent in the last four years.
Moises Leyva earns about $35,000 a year as a school custodian, but he isn't sure if he will be able to keep this house in Las Vegas. Even though his lender, Wells Fargo, was sanctioned for improper documentation on his loan, it may still seek to foreclose on him. Here, he gets ready for work as his girlfriend, Marie Gomez, sits on the couch.
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LAS VEGAS -- It was one of the most melodramatic scenes in this city's 4-year-old housing crisis.
In the broiling heat of summer, with daytime temperatures sometimes soaring to 107 degrees, Armando Cortinas and his wife Beatrice were camped out in their backyard after being locked out of their home when their lender filed an eviction action against them.
Mrs. Cortinas, a school cook, and Mr. Cortinas, an electrician, slept in a tent, cooked on their grill, washed up with the hose and kept drinks in an ice chest, all the while sharing space with their five dogs and two desert turtles.
The Cortinases, who have owned their home for 15 years, insist they always kept up with their mortgage payments, even during the period a few years ago when they were in Chapter 13 bankruptcy because of high credit card bills. They have hired an attorney to fight the expulsion.
Their lender, Wells Fargo, says they made very few payments between July 2008 and this past February, when the bank sold the property in foreclosure and then ordered the eviction.
In Nevada, banks that foreclose are supposed to post a notice of default on someone's property and later issue a notice of sale.
But Mrs. Cortinas says the first she knew of any problem was when a stranger showed up at her door one morning in June and said, "We need to change your locks, and you have to get everything out that you can."
She rushed to get clothes out of her washer and dryer, went across the street to a home where one of her sons lives and called her husband to come help her move as much out of the house as they could.
Since that day, the Cortinas family has gone back and forth between the backyard (where they say they need to be to protect the house against break-ins) and the house (during periods when they were able to get past the new locks). On Veterans Day, bank representatives once again appeared to tell them they had to move out, but when the Cortinases threatened to call the media and their lawyer, the visitors left.
The Cortinas case is highly unusual, but it's not uncommon for Hispanics in Las Vegas to be in trouble on their mortgages.
Hispanic residents make up 31 percent of the city's population, and last year, the metro region's Hispanic unemployment rate was 19.4 percent, 1.6 times greater than the unemployment level for non-Hispanic whites.
"Latinos were certainly hit hard" by the recession, said Barbara Buckley, executive director of the Legal Aid Center of Southern Nevada and former Nevada speaker of the House. "You have seen them affected by the layoffs in the casino and construction industry to a disproportionate effect.
"In the housing market, you saw predatory tactics being aimed at the Hispanic community. Certainly we saw a number of Spanish-speaking scam artists preying on the Hispanic community and many Hispanic Nevadans trusting someone who speaks their own language and getting scammed."
Louis Barajas, a financial adviser based in Southern California and author of "The Latino Journey To Financial Greatness," said the vulnerability of Hispanics to housing con artists is rooted partly in Mexican and Central American culture.
"When they come here, most of these people are very poor," he said, "and they arrive with the mindset that they can't trust the police or the banks. But what they saw in their countries was that the patrons , the landowners, were the wealthy people. Wealth is something they can touch and feel -- they feel wealthy if they can have a little piece of land."
While they don't trust banks, many Hispanics will rely on neighborhood mortgage brokers, even if they aren't ethical. At the height of the housing boom, Mr. Barajas said, "a lot of lenders we're giving back-end fees to the people marketing these loans," and there were reports of brokers falsely inflating homebuyers' incomes or offering risky loans without fully explaining the consequences.
Moises Leyva did not face those problems, but he still ran into a thicket of trouble after buying his current home in 2007.
Mr. Leyva, who was a landscaper at the MGM Grand casino at the time, was going through a divorce and needed a new place to live. Because he already owned one home, he assumed the mortgage payments on a home owned by a fellow landscaper.
His attorney, David Crosby, said those kinds of arrangements are common and legal in Nevada. The mortgage stays in the name of the original owner, but the deed is transferred to the person taking over the payments.
Everything was fine until 2009. That's when Mr. Leyva became embroiled in a custody fight for his two children, suffered emotional and physical health problems, and missed several mortgage payments. His lender, Wells Fargo, issued a foreclosure notice against him in July of that year.
Mr. Leyva filed for foreclosure mediation under a new Nevada law, and that led to a landmark court case in which Mr. Crosby demonstrated that the lender did not have documentation proving it owned the loan, a requirement under the law.
In July, the Nevada Supreme Court said Wells Fargo should be sanctioned for lacking proper documentation.
Still, the case isn't resolved. Even though Wells Fargo has agreed to drop all past interest and penalty payments, Mr. Crosby said, the bank has not indicated whether it will work with Mr. Leyva so he can stay in the house or whether it will simply launch a new foreclosure action against him.
Tom Goyda, a Wells Fargo spokesman, said that now that the original action against Mr. Leyva has been dismissed, he does not know what the lender will do next.
One of the ironies of such impasses is that when a foreclosure is being contested, the banks won't accept any payments, so no one is earning any money on the loan.
Mr. Levya, who has a new job paying $35,000 a year as a custodian in the county school system, is able to make a mortgage payment, but he has now lived in the house rent-free for nearly two years.
While that might seem to put him in a comfortable position, Mr. Leyva said during a September interview that if the bank eventually forces him out, he has no other immediate place to go. Without telling him, his ex-wife stopped making payments on the house that is in his name, so it has been taken over by the lender and his credit has been damaged in the process.
As for the house he lives in, it was worth about $250,000 when he bought it for $237,000, but it is now worth only $83,000, a decline of 66 percent.
At least he has a lawyer, though, Mr. Barajas noted.
Many Hispanic homeowners will not fight back when they get into financial trouble, even if they have been cheated, he said.
"Mexican Americans, after you talk to them, they always say, 'Si Dios quiere -- if God wills it.' There tends to be a fatalistic attitude about money in our community. When people have been ripped off and I've suggested going to police, I would often hear, 'If I was meant to lose it, I was meant to lose it.' "
First Published December 4, 2011 12:00 am