Susan Chapman, a client of Staten Island Legal Services (a program of Legal Services NYC), met with President Obama on October 9th to advocate for the creation of Consumer Financial Protection Agency. SILS Homeowner Defense Project Staff Attorney Joseph Sant has been working with Ms. Chapman, who was tricked into a payment-option ARM loan, for more than a year.
Ms. Chapman was one of four people the President met with in advance of a White House press conference.
STATEN ISLAND, N.Y. -- In the days before she left for
Washington, Tottenville resident Susan Chapman's
friends and family reminded her that she'd soon be
meeting with the leader of the free world, President Barack
Obama, who also yesterday became the third sitting American
president to win the Nobel Peace Prize.
For Ms. Chapman, who has tried unsuccessfully to undo a bad
mortgage wreaking havoc on her life, yesterday was her
chance to go straight to the top for help. She and a few
others talked privately with the president and Treasury
Secretary Timothy Geithner before attending a news
conference to promote the creation of a federal Consumer
Financial Protection Agency.
President Obama said that Ms. Chapman had an
"excellent payment history" until she was
contacted by a broker who told her that she could lower her
monthly mortgage payments. Instead, the loan she got
increased the principal she owed on her home by about
$20,000 in just nine months. Her monthly payments dropped
temporarily but recently jumped from $1,625 to $2,900.
"It's true the crisis we faced was caused in part
by people who took on too much debt and took out loans they
couldn't afford," the President said yesterday.
"But my concern are the millions of Americans who
behaved responsibly and yet still found themselves in
jeopardy because of the predatory practices of some in the
financial industry."
Others who joined the president yesterday included a
Vietnam veteran hit with more than $1,000 in bank overdraft
fees and another woman who was promised a low fixed-rate
mortgage but ended up with two more expensive loans.
Thousands of homeowners now threatened with foreclosure
because of problematic loans have hit brick walls when they
try to change the terms of those mortgages with lenders.
They spend hours on the phone and complete endless
paperwork, but many can't get answers.
One New Springville resident recently told the Advance she
believed the stress of trying to modify her mortgage with
Bank of America led to her husband's fatal heart attack
in June.
Ms. Chapman, 52, a single mother of two who has owned her
home since 1993, got a cold call from a broker in 2007
promising her she would pay $400 less a month on her
mortgage. IndyMac Bank, a major subprime lender that was
shut down by the government last year, made the loan.
"I don't want to see anyone go through what I
went through," Ms. Chapman said yesterday.
The President said his proposed financial protection agency
would set clear rules for consumers and banks, mandating,
for example, simple, plain-English mortgage disclosures.
Rep. Michael McMahon (D-Staten Island/Brooklyn) recommended
Ms. Chapman and Legal Services of Staten Island, which runs
the Foreclosure Prevention project in St. George, to the
White House. McMahon's office has been trying to help
Ms. Chapman modify her loan since last year.
Karen O'Shea is covers real-estate news for the
Advance. She may be reached at oshea@siadvance.com.
