The subprime effect on new Americans
Competing For Sale and For Rent signs hang in the front of new townhomes in Centerville, Virginia.
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Doug Krizner: Subprime mortgages have become a curse. With all the economic damage they've done, it's easy to forget they made it possible for many to buy their first homes. Especially immigrants who had yet to build up good credit. So how are these new homeowners faring now? From the Americas Desk at WLRN, Dan Grech has one story.
Dan Grech: Catalina Brayan is from the Dominican Republic. When she arrived in the U.S., she found work in the only business she knew: Sewing. From 6 a.m. to midnight, for 40 years.
Catalina raised her son Ramon in eight different homes, always on the move in search of a safer neighborhood. Ramon says there was one constant: the click of the sewing machine.
Ramon Brayan: There's a lot of mothers out there that wouldn't make the type of sacrifice my mom made for me. So I feel indebted to her for life.
Ramon was the first person in his family to graduate high school, to finish college, to get an MBA. He began repaying his debt to his mom in Thanksgiving of 2001, when he bought her a brand new house.
Brayan: It was a surreal feeling, like just being in the living room of our new home. Like, all the furniture was still in boxes, and we're like, eating turkey on the floor. And I'm just looking around and just like wow, you know, I did it.
Ramon started his career in ad sales, but a cousin lured him into real-estate finance. He started working for Resmae, a subprime mortgage lender. He made $30,000 in a single month.
Brayan: Then your mind starts wandering. You see it as, OK, I made 30 this month, it's going to stay like that. You know, me being a business person as well, I'm like, let me buy some more property and hold onto it.
Subprime lending, much maligned now, did offer many Hispanics like Ramon Brayan the opportunity to own a home. The number of Hispanic homeowners nationwide jumped by nearly 50 percent in just seven years.
Ramon sold that American Dream. And he bought it, too. He purchased the home for his mom, another for himself, his childhood condo and an investment property. All four have adjustable-rate mortgages. All four are subprime loans.
Ramon leased an office to go into business for himself. Then the mortgage market crashed. Now, he's out of a job, and he's on the hook for $16,000 a month. Plus, he supports his mother.
Brayan: You pick up the mail and there's like, a ton of bills, and you see a lot of money going out of your bank account and not as much money coming in. I've worked really hard to get to where I'm at, I don't want to lose it. So how do I keep it?
Ramon's looking for a job back in ad sales. He was forced to rent the house be bought for his mom.
Catalina's back in their cramped childhood condo. A framed photo of Ramon in a cap and gown hangs by her bedroom door.
In Miami, I'm Dan Grech for Marketplace.