When Alvin Clavon received a foreclosure notice on his South Los Angeles home that he shares with his wife and three boys, he was stunned.
Clavon purchased the home in 2003 with a fixed rate loan. Two years later, he worked with a mortgage broker to refinance his home with another fixed rate loan. But just before he was to sign, a friend from church offered the family an interest-only, adjustable-rate mortgage.
The decision was one that would haunt Clavon and his family. "I trusted this guy, but it was the worst thing I could have done," said Clavon.
As his mortgage payments ballooned, Clavon sought help from the Association of Community Organizations for Reform Now (ACORN).
According to Acorn, upper-income blacks were 3.3 times, and Latinos 3 times more likely than upper-income whites to have a high cost loan when purchasing a home.
Due to soaring sub-prime loans, homeowners across the country find themselves facing balloon payments that are beyond many homeowner's grasps. According to recent reports, California ranks second in the nation in foreclosures and eight of the top twenty cities in foreclosure filings are in California.
Clavon, along with other homeowners, joined ACORN members and stormed the offices of Carrington Mortgage Services in September demanding that the company renegotiate their loans. The president of Carrington promised to meet with the homeowners but disappeared after the homeowners were seated in the conference room.
The protest shook up the mortgage company, which eventually sat down with the homeowners to discuss their loans. "Yes, eventually some representatives from the company did meet with us," said Clavon, who added that ACORN has been instrumental in helping with the negotiations. "They listened to our demands and our proposals and they took some of our advice."
Clavon said that with foreclosures occurring all over the country, homeowners need to become proactive to save their homes.
"The protest brought us some national coverage and jump-started dialogue between the mortgage company and the borrowers," said Clavon, who said that he and members of ACORN have met several times with representatives at Carrington to discuss renegotiating mortgages.
Clavon has advice for homeowners who may be in trouble of losing their homes. "People should be aggressive and assertive in dealing with their mortgage company," said Clavon. "When you take the bull by the horn, you can fight your way out of your circumstances. There are a lot of people right now who are like deers in the headlights," said Clavon. "Don't roll over for these companies. If you stand up for yourself and fight, you can work your way into a better situation."