In Debt and Out of a Home : Eviction: Woman who accepted improvement loans must give up her residence of 33 years. An attorney says the action underscores the problem of lenders soliciting recipients who can’t repay, and then--legally--foreclosing.
The eviction began about 9 a.m. Thursday, when a cadre of Los Angeles County marshals used a crowbar to force their way inside what was once Zonell Law’s two-bedroom stucco home in Watts.
The men lifted the ailing, 56-year-old grandmother onto a tarp and carried her--kicking and screaming--out to an alley off East 101st Street near Main Street. And that’s where she sat, a bottle of oxygen at her side, as Mike Gaffaney, the president of Otwin Investments of West Los Angeles, took a quick look around the house that is now his and then padlocked the door.
“All my kids growed up right here,” Law said, slumped in the alley by her wheelchair. She and her husband bought the house in 1960, she said tearfully, for $11,500. She had raised six children there. “I just want my home,” she said. “That’s all I want.”
But Law is unlikely to get it back. She borrowed money to improve her house, but says she was unable to make the payments. So she lost the home altogether.
Neighbors and relatives said they thought Law had been cheated. In fact, it appears that what Otwin Investments and an affiliated company, United Interstate Financial Services, did was completely legal.
Even so, Kurt Eggert, a staff attorney at Bet Tzedek (House of Justice) Legal Services, said Law’s predicament is “an illustration of a significant problem.” Especially in Los Angeles’ poorer neighborhoods, he said, “There’s definitely a pattern of people going door to door lending money. . . . But there’s no requirement that hard-money lenders determine that the borrower can in fact repay the loan. So often, people end up having their houses foreclosed.”
Eggert and other legal aid groups note that ignorance is a big part of the problem. They counsel homeowners not to sign any papers unless they are first reviewed by someone who understands contracts. Lawyers say many door-to-door sales representatives offer higher interest levels and balloon payments that are higher than many homeowners can pay.
The way Law tells it, her problems began when a nice young man knocked at her door in 1986. The man looked at her doors and windows, which were boarded up to protect against vandals and gunfire. “How about if we put some iron windows and doors on?” Law said he asked. Then, when she hesitated, she says he offered her a $5,000 home improvement loan from United Interstate Financial Services.
The loan, which she secured with her house, went through. And soon, Law said, the loan officer was back, encouraging her to borrow some more.
“I said, ‘I feel like y’all are trying to set me up and take my property away,’ ” she recalls. “I told him I did not want the loan unless there was insurance to cover me.” She said she received assurances that mortgage insurance would protect her from losing her home if she defaulted on the loan. Reassured, she said, she borrowed more.
Not long after that, the former beauty technician and seamstress says, she got sick. Her body does not process oxygen efficiently, she says, and she is often weak and tired. She could not work. Her daughter called the loan company, Law said, and was told the insurance would cover it. “So we didn’t bother about it no more.”
In December, 1988, United Interstate Financial Services foreclosed on Law’s home, which was then assessed at a value of $97,417. Jim Vickman, an attorney for the company, would not disclose the terms of the loans, but said she had defaulted on a total of $24,325.61. Vickman said that, contrary to Law’s assertions, she never had mortgage insurance.
Otwin Investments bought Law’s home at a foreclosure sale in February, 1989, and became her landlord, Vickman said. She immediately noticed that Otwin and United Interstate Financial Services had something in common: They share an address in the 11000 block of West Olympic Boulevard. According to Vickman, who is the attorney for both companies, they also share “some common ownership.”
Law said the rent on her 1,280-square-foot home just south of Century Boulevard was set at $900 a month. Living on only small disability payments, she said, she was unable to pay it.
Vickman said that ever since, Law has not paid a cent. “I don’t think she’s been paying anything,” he said. “She’s been living there for free for three years.”
Judging from the looks of the small home, she has not been living very well. There are no steps leading up to the front door--just two planks that form a wobbly runway for her wheelchair. There is no doorknob on the door--the security bars, which she had installed back in 1986, provide the only latch. The house is covered by gang graffiti.
“I used to get around and do things,” Law said Thursday, as she sat with a plastic shopping bag full of loan papers in her lap. “Lately, I haven’t been able to do nothing. . . . Now, they put me outdoors,” she said. “I have no place to go.”
