Banks Help Small Debt Become a Big One

In his briefcase, Imar Hutchins carries a certified check for $25,000. It is a crazy amount to walk around with, but for the last nine months, a series of banks have refused to take the money, even though Mr. Hutchins owes it toward a mortgage on a small apartment building in Harlem.

In fact, the $25,000 check is the fourth and largest payment that Mr. Hutchins has tried to make after he fell one month behind last year. Since then, the banks have rejected every penny he has sent. At bewildering speed, and without telling him, the original bank — Washington Mutual — invoked a clause in the lending note and moved to seize the building, at 763 St. Nicholas Avenue, near 148th Street.

So many foreclosures are hitting the courts, the stories of greed and folly by all parties could fill volumes. But the machinery of foreclosure also has a brainless side. Even generally responsible people can get trapped among the shards of the global financial crisis.

In 2005, lenders filed foreclosures on an average of 14 properties a day across the city. This year, it is 65 per day.

“Banks get bought by other banks, they change their philosophies,” Mr. Hutchins said. “The people fall through the cracks. No one is really looking out for the customer.”

While Mr. Hutchins’s case is just one foreclosure among thousands now moving through the courts, a judge saw it as an example of how things should not be done.

“The facts in this case, in their simplicity,” wrote Justice Emily Jane Goodman, “illustrated the state of property foreclosures in New York and the economic relationship between banks and their borrowers, as well as the surrounding ironies.”

Mr. Hutchins, 39, who, among other things, co-founded an elementary school in Atlanta while he was a student at Morehouse College, ran a vegetarian restaurant in Washington, and got a law degree from Yale, has lived in Harlem for the last five years. His grandfather Lyman T. Johnson sued the University of Kentucky to force it to admit black students in 1949. “My father was a Realtor,” Mr. Hutchins said. “I tried like hell to do anything but real estate.”

To read the original article click here