By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
Lynch is a vice chair of the DNC. As deputy mayor in the administration of David Dinkins, he held down the progressive wing of City Hall. Abrams, who served as attorney general from 1979 to 1993, has a strong history of political support in the black community, winning 84 percent of the African American vote in his 1992 bid for the U.S. Senate.
Community leaders in Bedford-Stuyvesant are taken aback by the pairs' allegiance to Delta. "I would never have suspected that Bill Lynch and Bob Abrams would be associated with these practices," says State Senator Velmanette Montgomery, whose district includes Fort Greene and part of Bedford-Stuyvesant. "I don't know that they understand the extent to which Delta's practices have been detrimental to elderly African American and Latino people in this city."
Mary Lee Ward, a 69-year-old Bedford-Stuyvesant widow, alleges in court affidavits that she fell prey to a broker's ploy four years ago. At the time, her only income came from social security and a rental unit upstairs in her three-story brick house near the corner of Gates and Tompkins avenues. Desperate to raise $10,000 for legal help to win custody of her great-granddaughter, she called a broker with Tarheel Funding in Flatbush, Linwood Roberts. He gave Ward mortgage papers to sign that showed she would receive more than $11,000. She signed, but went home without a check, according to Ward's affidavit in the Appellate Division of state supreme court, where she is seeking to overturn the foreclosure action Delta and Bankers Trust won against her in lower court.
Ten days later, desperate for the money, she finally caught up with Roberts, who, according to court documents, handed her a check for only $1467, along with altered copies of papers Ward had already signed. Ward was bewildered. "I looked at the check and almost passed out," she recalls. Only later did she realize she had signed off on an $82,500 mortgage refinancing with Delta Funding at 14.9 percent interest. Roberts had pocketed $8250 as his fee; Delta took another $3671 for itself and several thousands more to pay various fees and taxes. Ward says she tried to back out of the loan, but was unable to do so.
In court, Delta Funding's lawyers argued they tried to cancel the loan upon receiving word that Ward was unhappy with the deal, but Ward did not follow through. They added that any malfeasance of the independent broker was irrelevant to the legitimacy of the foreclosure. Ward's attorney, and others fighting similar foreclosure actions, counter that independent brokers are clearly acting as agents of the lender i.e., Delta Funding and the lender is therefore responsible.
Two weeks ago, community groups participating in a citywide foreclosure-prevention task force thought they were on the verge of winning stiff new state banking department rules to cramp Delta Funding and similar lenders' most outrageous behavior. But within a few days, they were shocked to find the regulators announcing the Delta settlement, which excluded the most troubling practices from government control, says Josh Zinner of the Foreclosure Prevention Project at South Brooklyn Legal Services.
If the state settlement is finalized in court, Delta will devote up to $7.25 million to reducing borrowers' monthly payments. It also places 525,000 shares of the company's stock in a trust to be used for borrower counseling. But, says Zinner, "There is a loophole for everything in this settlement. I mean everything." One provision allows Delta to self-certify its compliance. "It's ridiculous. It's a joke," he says. "We're pissed."
"What do they think they are doing?" adds Sarah Ludwig of NEDAP, who had spoken strongly in favor of the banking department's proposed new regulations at the hearings two weeks ago. "If this is what they consider enforcement, I'm going to come to their next hearings and tell them they are full of it. We're going to be turning our guns in the other direction."