Lawrence Wiggins knows he got a loan to fix up his house on East 94th street a few years ago. At least some of the time he knows.
Mozella Thomas: She say you got a loan in 2003.
Lynette: To fix up the house.
Lawrence Wiggins: Hmmm. I don't remember.
Wiggins is 75 years old. He had a stroke 12 years ago that his family says affected his memory. About a month ago, his family found out that Wiggins was in foreclosure on a $75,000 refinance. Wiggins is the father of Mozella Thomas's son. She's spent the last week trying to figure out if Wiggins has been paying his mortgage.
Mozella Thomas: Who you been paying 450 or whatever too?
Lawrence Wiggins: I ain't paying nobody - that money's sitting underneath my chair.
Mozella Thomas: $450 underneath your chair?
Lawrence Wiggins: Yeah. All together.
Wiggins family believes the senior was taken advantage of when he responded to an ad from Quality Remodeling in 2003 to get work done on his home. The contractor, Tony Defario, helped put the loan together with Southeast Financial Services. The loan officer at Southeast Financial wouldn't talk on tape but said he tried to put together a good deal, one that paid off Wiggins' previous loans and lowered his monthly payments. The contractor - who also wouldn't talk on tape - has moved to Las Vegas and doesn't remember Wiggins.
Lawrence Wiggins: They put me in a trick bag. They put me in a trick bag. They just snatched my money and I didn't get no results. At all.
Multiple lenders are on Wiggins paperwork - People's Choice originally made the loan, U.S. Bank now holds the note, Credit Suisse First Boston is the funder, and a subsidiary of Wells Fargo manages it. It's a perfect example of how complicated mortgage lending has become in the wake of the 90s housing boom. Lenders now sell mortgages to companies or banks who bundle the loans into bonds which are then bought by investment funds. Subprime loans like Wiggins' were a hugely popular investment tool. Inez Killingsworth of East Side Organizing Project says out of town investors made lots of money without proper oversight of the loans.
Inez Killingsworth: The banks discovered that they could have another market in subprime lending, and make lots of money at it. It was nothing but greedy.
Now some of these lenders are facing serious problems. Most of the loans lenders made were not predatory or fraudulent, but Bose George, an analyst at KBW research, says investors are getting nervous about how easily the loans were made as rising numbers of them start to go bad. Now investors want the lenders to buy back some of the loans.
Bose George: The secondary market is basically saying the risk of these mortgages are high and they've started backing away from them. The lenders are in trouble because their getting all these loans put back to them and at the same time volume is going down and profits are getting hit very hard.
The lenders involved in Wiggins' loan either had no comment or did not return calls in time for the story. His home was sold in Sheriff's Sale Monday. Yesterday, Cuyahoga County Court granted a stay so Wiggins has another month to save his house. The property means a lot to Wiggins. His family's owned it for 58 years.
Lawrence Wiggins: They bought in '49 and we moved in there in 1950 and we stayed in there until...
At this point, Wiggins pulls out a red checkered handkerchief and dabs his eyes.
Mozella Thomas: It's ok, it's alright.
There may be good news. A Wells Fargo spokesperson asked me for contact info for his family. It's time, she said, to get people talking. I'm Mhari Saito, 90.3.