Know why I am so angry about the current mortgage crisis that has been going on? It's because it is an issue that I had written about previously. It should come as no shock that what happened - happened.
Originally Published June 22, 2006
One of my best friends as I was growing up always used the lesson out of Galatians 6:7. His basic premise for life was that as a person, we reap what we sow. He would forever remind me that I cannot plant wheat in the spring and spend the entire summer talking about the corn I would harvest. If you plant wheat, you’ll harvest wheat. You won’t harvest corn!
That life lesson has been one of my foundations. I use it and the wonderful old folk’s saying, “the acorn does not fall far from the tree”; “you get what you paid for” to be some of the guiding principals in how I live and see my life. But as a community, do those same lessons apply? Is the Austin community reaping what it has sown? Are the young people in Austin representative of the elders who live here? As a community, are we getting what we paid (taxes) for?
Recently there was a story in the paper about a house at 1054 N. Lorel. The house owned by HUD is in bad shape. The front and back doors were messed up, the kitchen was missing, it had exposed pipes and wiring. You get the picture. In general, that house would need a complete tear out and rehab in order to make it livable again.
Anyway as the story went in the paper two men, one from Wilmette and the other from Highland Park (both very well-to-do northern suburbs) decided to attempt to play a mortgage fraud game using that house. In a nutshell, the house was appraised at $105,000 in 2005. Using a complex mortgage fraud scheme, they did get a new appraisal for $257,000 (based on the man from Wilmette) and a loan to match. Then they recruited a buyer who agreed to lie about his earnings and the work done on the house. The man from Wilmette added to the lie by being an appraiser and stating that work had been done on the house to make it fully livable with new floors, kitchen, bath, etc. In reality, very little had been done to the house. The game was to get the mortgage money ($257,000), pay off the amount to buy the house ($105,000) and run off with the difference. The buyer turned out to be an informant for the FBI. At the closing for the house, the FBI arrested the appraiser.
What does a situation like that have to do with reaping what you sow? Well as a community if we don’t stay watchful for what others are doing, we will reap what they have sown. Sometimes it can be good. But let’s be real. In the black community, when others play games using us as their pawns, it only benefits them and never us. In the case of the house at 1054 N. Lorel, let’s say the scheme worked. Based on the way the Cook County Assessor office works, that transaction closing that house for $257,000 would have gone thru to the Assessor (taxman) office. The Assessor office would then say that every house in the vicinity of 1054 N Lorel is now worth $257,000. When it came time to determine what your property value is and how much you should be paying in real estate taxes, the house at 1054 N. Lorel would be the current standard. Your tax bill would then go from (example) $1200 a year to $2400 a year since the property value has doubled to almost tripled
How can that be? Well, the truth is that the Assessor’s office and the way they calculate your property taxes is antiquated. It’s old and obsolete. 50 years ago, there wasn’t any mortgage fraud going on like today. People paid what the house was really worth and not an inflated amount. What can be done? Well I say all three Austin aldermen, Smith, Mitts and Carothers should begin an immediate investigation into mortgage fraud in their areas of Austin. They should call in the Board of Review and allow people an extra opportunity to contest their property taxes based on Austin being targeted by those who want to commit mortgage fraud (and have probably already committed it here). They should also become the loudest voices in city council for property tax reform.
In the meantime, everyone should go online and look at the closing transactions for properties in the vicinity of their houses. The Chicago Tribune is a good website to use. If a house sold for more money that what it seems it should have, bring it up to your elected officials as well as write us here at the paper.
BILLION DOLLAR WINNER - THE NOVEL
5 years ago