Irvington residents are rallying behind a local veteran in danger of losing his home to foreclosure after a bout of post-traumatic stress disorder left him unable to work.
More than 1,500 people have signed an online petition for Clifton Beckley, and veterans and community activists came to his Maple Avenue home to pledge their support prior to a scheduled February court date.
“We’re going to fight,” Beckley said of the foreclosure order sought by HSBC bank. “I’m not going to walk away from this neighborhood like so many have done in the past few years.”
But it is unclear whether the effort will succeed. Unlike most of the nation, the number of new foreclosure cases is increasing in New Jersey, climbing back toward the record levels of the Great Recession.
The state court computer system showed 54,332 foreclosure cases filed in calendar year 2014, the third-highest total on record and 10.6 percent more than 2013. (The courts report their data for the state fiscal year starting July 1. The 2014 fiscal year also was the third-highest for foreclosures, and the monthly numbers were rising in early fiscal 2015.)
That is happening even as real estate analysts show foreclosures receding in much of the country. Nationwide, about 567,000 homes were somewhere in foreclosure in November, down from about 880,000 a year earlier, according to CoreLogic of Irvine, Calif.
Even in New Jersey, the firm found the foreclosure rate declined 1 percent year over year, to 5.3 percent of all properties. But that was 1.2 percent more than second-place New York, and the report not reflect the surge in new foreclosure filings here. New Jersey also continued to lead the nation in the percent of mortgages that are “seriously delinquent,” 90 days or more, at 8.9 percent of the total, according to the report.
The effects are evident in Beckley’s neighborhood off Springfield Avenue. The streets are dotted with deteriorating or possibly vacant buildings, alongside others that are clearly well maintained. The story is repeated elsewhere around Irvington, a tidy working-class community with a high percentage of properties in foreclosure, some the result of mortgages with onerous terms and interest rates of 10 percent to 20 percent.
Collie Stradford Jr., senior vice commander of VFW Camptown Post 1941, said the effects are obvious, but it is unclear whether other local veterans are in the same dire straits as Beckley. The post is planning a meeting to discuss the impacts of foreclosure, he said.
“We have seen this over and over and over again,” said former Mayor Wayne Smith, another Beckley supporter, who calls the situation “Chris Christie’s real legacy to New Jersey.”
To fight continuing foreclosures and their economic impact on the state, “all levels of government have got to address this in a very aggressive fashion,” Smith said. But there’s been no leadership in Trenton and little elsewhere, he said.
While in office, Smith tried to use the township’s power of eminent domain -- often used to take properties for some ostensibly “public purpose” such as roads or shopping malls -- to help homeowners like Beckley keep their homes.
The effort foundered last spring after he ran afoul of the Essex County Democratic Party and lost reelection, although Newark Mayor Ras Baraka is considering a similar plan.
But Beckley acknowledged that’s not going to help with a court date looming. Instead, he is hoping to argue his record of good citizenship and his willingness to negotiate “reasonable” repayments.
Like other victims of the housing bubble, Beckley acknowledged his own näiveté. After serving with an artillery battalion of the Americal Division in Vietnam, he came back “with all the problems of a veteran.” But eventually he managed to find steady work, ending at Home Depot for more than two decades. He bought the house in 1991, and he and his wife had two children.
But in 2006, he was solicited by a mortgage brokerage, who “told me I was sitting on a goldmine,” Beckley said. “They came back with an appraisal that said my home was worth more than $316,000,” roughly three times what he paid for it.
True, the deal jumped his payments to more than $2,600 a month. But Beckley and his wife, who works for Essex County, initially had no trouble making them while putting their new-found equity to use.
“We used the money to pay off credit cards and other debt, put a new roof on, and as you can see, resided the house, new windows,” he said.
But it was the absolute wrong time to refinance. The housing bubble was about to burst, and the inflated appraisals that served as the basis for Beckley’s borrowing and other mortgages were about to turn to smoke.
So when his PTSD recurred badly in 2011, and he was ruled unfit for work, all the equity the Beckleys had built up in the property was no longer there. After two months of hospitalization, he returned to foreclosure notices, he said. The family has tried to pay -- “my wife is very embarrassed about all this" -- but that $300,000 mortgage no longer adds up, he said.
“I’m getting disability, my wife has a job, we’ve taken in renters, so we can make reasonable payments,” Beckley said. “We just can’t afford to pay based on an appraisal that’s not true. Houses around here, if you can sell them, you can’t get $100,000. We’re hoping the bank would recognize that if they take the house from us, they're not going to get anywhere near $300,000 for it.”
“HSBC has a strong commitment to home ownership and views foreclosure as a last resort,” said Laura Powers, HSBC vice president of media relations, but declined to discuss an individual case “in order to protect our customers' privacy.”
More than 1,500 people haveto HSBC CEO Stuart Gulliver, urging him to offer the Beckleys a deal that would allow them to keep the home.
In a 2012 settlement with the U.S. Department of Justice, London-based HSBC admitted it had laundered money for Colombian and Mexican drug cartels, as well as conducting illegal transactions for customers in Iran, Cuba, Syria, Sudan, and Burma. It paid a $1.9 billion fine -- about five weeks worth of its revenue -- and no bank officials were charged.
In November, HSBC was among five banks fined a total of $2 billion by American and British regulators for rigging the foreign exchange market, which handles transactions worth $3 trillion a day.
In March, the Federal Deposit Insurance Corp. announced a suit against HSBC and 14 other major banks for rigging another key financial transaction rate, Libor (London Interbank Offered Rate), alleging the manipulations caused “substantial injury” to other financial institutions, including some forced to close during the Great Recession.
“It’s outrageous that banks can launder money for drug cartels and fix interest rates, and instead of going to jail, they get bailouts,” said Mary Szacik, an organizer for New Jersey Communities United. “But when our neighbors and veterans need help, nobody is there with a bailout for them.”