Advocates said immigrants were easy prey for unscrupulous brokers and real estate agents who wanted to profit during the housing frenzy when everybody was busy buying and selling.
When Ramon Gallo bought a $300,000 home in Westborough in late 2006, he thought he had achieved his dream. Sixteen months later, Gallo, who signed for an adjustable-rate mortgage, has fallen behind on his payments and fears he may soon live a foreclosure nightmare.
Gallo, 38, who came from Mexico five years ago, is part of a wave of immigrant homeowners who have been hit hard by the national foreclosure epidemic. Reports say new immigrants, along with minorities and low-income Americans, were the targets of sub-prime loans, which played a key role in the foreclosure epidemic.
Many immigrants bought homes during the boom market five years ago, taking advantage of adjustable-rate mortgages, which made it easy at first glance to buy properties.
Three out of every 10 houses sold to immigrants in Massachusetts were bought by Brazilians, according to a report published last year by the Boston Redevelopment Authority.
Advocates said immigrants were easy prey for unscrupulous brokers and real estate agents who wanted to profit during the housing frenzy when everybody was busy buying and selling. Immigrants not only lacked information about the home-buying process because of language barriers and their unfamiliarity with the American real state market, many were misled or misinformed.
Gallo, who until recently worked as a bartender at a Mexican restaurant in Framingham, said he was surprised when the bank told him he was going to pay much more than he expected.
"Nobody told me I had to pay for insurance, property taxes," said Gallo, who saw his bill go from $2,100 to $2,900. "I feel trapped. I know the bank can take my house."
The mortgage crisis has hurt people across the board, said real estate agent Argentina Arias, but new immigrants who bought homes with no down payment and adjustable rates have suffered greatly.
"They bought houses at high prices," said Arias, whose clients include Latinos and Brazilians. "Many were not explained what it involved, some who were told maybe didn't understand, and others didn't ask. People wanted to live the American dream."
The dream turned into nightmare everywhere.
Foreclosuresmass.com, a Framingham company that collects foreclosure petitions from the state's land court reported in the past two months that Framingham has had 42 foreclosures, but over the past six months, it had 171 - nearly one a day.
In the same period, Marlborough had 120 foreclosed properties, Waltham, 39; Ashland, 35, and Milford 97, and the numbers may increase. A recent report by the Foreclosuremass.com said foreclosure rates were up in more than 80 percent of Massachusetts' communities.
In Milford, Pastor Peter Lopez of Family Worship Center has seen up close the effects of the mortgage crisis among his parishioners, who are mostly Hispanic immigrants.
"We've seen pressure from everywhere," said Lopez. "You're fighting for your immigration status, living with the fear of being deported and now the possibility that everything you've worked for, you might lose it too."
Lopez believes many immigrant homeowners were misled by some real estate agents and mortgage brokers.
"If they were able to mislead Americans who are educated and speak the language, imagine what they did to people who are uneducated and not able to read English," he said.
In Framingham, Ana Delgado, a mortgage specialist, has been busy during the past six months trying to help more than 50 people, most of them Brazilians, save their homes. Of those 50, most are struggling to keep their properties but some have already lost them.
As she reviewed files at her Concord Street office, Delgado noted a worrisome pattern: most had been charged extremely high fees, were given loans they didn't qualify for, and were misled about what they were getting into. Some were advised to refinance when there wasn't value in doing it, and others were clearly taken advantage of.
"A lot of misinformation was passed along," said Delgado. "Many people didn't know what adjustable rates meant, some thought the rates were going to change in five years, not two years. They were led to believe they could afford something they couldn't afford to begin with."
In many cases, Delgado said, immigrants were easy prey for brokers, some of whom were immigrants as well. Many immigrants preferred to deal with a broker who spoke their language to help them achieve their dream.
"Unfortunately, immigrants don't help each other," said Delgado, who hails from West Africa. "Some immigrants take advantage of each other."
In Waltham, mortgage broker Carlos Linera, whose clientele is mostly Hispanic, agrees. "From what I've seen, many have been taken for a ride," said Linera.
Linera hosts a Spanish-language radio program on finances through WRCA 1330 AM and said he has been swamped with calls from listeners asking for advice on how to keep their homes.
"I've hearing horror stories since January of 2006," said Linera. "It's horrible across the board. At the end of the day, an immigrant is losing his home next to a white guy from Worcester who is also losing his home. But many immigrants didn't have information about the process, faced language barriers and were sold a false dream."
Brazilian pastor Marcia Cunha, who leads a church in Holliston, feels the same way.
"Many people were deceived," she said.
She has heard of stories in which many Brazilians bought houses with an individual tax identification number, but were later rejected by the banks that demanded a Social Security number. After September 2001, restrictions to offer loans to people without valid Social Security numbers were put in place.
"Some bought houses, and after a year, the bank told them they had to show a Social Security number," she said. "Many lost their homes."
Not only were consumers blinded by the enthusiasm driven by banks, brokers and mortgage lenders in the midst of the housing boom, they also rushed to buy houses hoping to make money, said Brazilian-American real estate agent John Dias.
Some planned to rent their properties while watching their investment grow, but the economic downturn, the scarcity of jobs and more restrictions to find employment made the investment riskier.
When some lost their jobs and had to face the new adjustable-rate mortgages, many fell behind in their payments, and when towns across MetroWest began cracking down on illegal rooming houses, many felt the investment was not going to pay off. The failure of immigration reform in June last year dashed immigrants' hopes, said Dias.
"Many are leaving and giving up their dream," he said. "Many lost their houses and went back to Brazil."
Frustrated by their losses, some have stripped their foreclosed homes of countertops, windows, appliances and anything they could take, said several real estate agents. Recently, as reported by the Marlborough Enterprise, Marlborough Code Enforcement officer Pam Wilderman found a foreclosed home on Milham Street, whose former owners have left without shutting off the water.
Town officials and homeowners are starting to worry about the specter of abandoned and unkempt properties 'lost to foreclosure.'
As for Gallo, he plans to hold onto his property, where he lives with his wife and their two children, Alejandra, 11, and Rodrigo, 4.
To make more money to help pay the bills, Gallo found a job managing a Mexican restaurant in Bedford, N.H. He spent $40,000 remodeling the house, but with the real estate bust, he knows he won't be able to sell his home for the price he paid. Still, that loss is better than foreclosure, he said.
"I cannot cry, I cannot back down," he said. "With God's help, I'll carry on and keep my house."
Liz Mineo can be reached at 508-626-3825 or email@example.com.
MetroWest Daily News