a real crime with real criminals

How hard is anyone looking for the creeps who defrauded these people?

I asked Kim Richardson, who is 59 and lives in a modest ranch house in Rocky Mount, N.C., what she would do if a hearing next month goes against her and she loses her home to foreclosure.

After a long pause, she said, in a voice faint from worry, “I don’t know. I’ll be out on the street, I guess. I don’t have anywhere to go.”

Ms. Richardson, who lives on a pair of monthly disability checks, lies awake night after night, unable to fend off the frightening homeless scenarios that dominate her thoughts. “I never believed that anything like this could ever, ever happen to me,” she said.

If you believe Ms. Richardson’s account, and I do, she was fast-talked into a mortgage that would have been impossible to pay off with her fixed income. Foreclosure would have seemed inevitable. But Ms. Richardson and her current lawyer, Carlene McNulty of Raleigh, N.C., said the figures that would have made it obvious to Ms. Richardson that she couldn’t afford the mortgage were deliberately concealed.

While the news media have been focusing on the banks, brokerage houses and mega-millionaires being buffeted by the ill winds of the financial crisis, the millions of lower- and middle-income Americans sinking toward the protracted hell of destitution are getting very little attention.

Older Americans are taking a particularly wicked hit. Analysts at AARP have found that “Americans age 50 and over represent about 28 percent of all delinquencies and foreclosures in the current crisis.”

Losing a home to foreclosure is a disaster for anyone. It’s a catastrophe for older people. The AARP Public Policy Institute, in a recent report, poignantly explained: “For Americans age 50 and over, losing a house represents a loss from which there is limited time to recover, and for some, a recovery may be impossible given their age and limited incomes.”

When Ms. Richardson bought her house in December 2005, she tried to make it clear that she could not afford monthly payments much higher than $500. Fine, she was told. She closed the deal with the understanding that she had a fixed-rate mortgage with monthly payments of $537. Prudent and skeptical, she tried to find out if there were any economic bombs hidden in the confusing mass of paperwork that she was confronted with.

“I had all these stacks of papers at the closing,” she told me, “and they were just passing papers back and forth to me, back and forth, telling me to sign. And I kept saying, ‘Wait a minute. Wait a minute.’ ”

She was assured that nothing untoward was going on.

Ms. Richardson did not have a fixed-rate mortgage. Her monthly payment rose, and rose again, eventually passing $800, which she could not pay. There was also a balloon payment provision hidden in the welter of documents, along with other obligations that would not emerge until Ms. Richardson was waist-high in economic quicksand.

read the rest: Op-Ed Columnist – Climbing Down the Ladder – NYTimes.com.