This is a quote from an article about the American Dream. The complete article is referenced below:
Susan Thompson, owner of a tidy home in Gary’s Glen Park neighborhood, went hunting for a home equity mortgage to pay off medical and credit card bills in 2006.
The Times analysis shows that Thompson’s heavily minority, middle-class neighborhood had the second-highest concentration of subprime lending in Northwest Indiana.
In May of 2006, she refinanced the $30,000 left on her mortgage and paid off her bills with a home equity loan through Saxon Mortgage, a subsidiary of Wall Street’s Morgan Stanley.
She knew 11.9 percent was a high interest rate for a home loan, but it was lower than the interest rates on her credit card and medical bills.
And she made her $840 monthly loan payment, which included taxes, every month — until the floods of September 2007 filled her home with five feet of water. The family had to move, and she missed two loan payments.
“I explained what happened,” Thompson said. “They said we gave you 30 days, a disaster does not take that long.”
Soon, Saxon was calling 10 times a day, trying to recoup the missed payment.
It wasn’t until she went to the Northwest Indiana Reinvestment Alliance that she found out how bad a deal she had received from Saxon. She carefully composed a letter under Guy’s tutelage demanding a fixed 6 percent rate and sent it to Saxon. Her monthly payment was reduced to $590 per month from $840 for the next five years.
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