Related: California reeling from the foreclosure crisis

Profiles: Still hopeful

Thursday, July 21st, 2011 

The Investigative Reporting Workshop and New America Media profiled those hardest hit by the foreclosure crisis in communities of color.

New America Media

SAN BERNARDINO, Calif. — Margaret Cedeno, 54, says she’s in an “unbearable limbo.” She is three months behind on her mortgage payments, but hopes to obtain a loan modification this year. If she goes into foreclosure, the disabled mother of five says she and her family would have nowhere to go.

Photo by Joseph Rodriguez

After two home loans, Margaret Cedeno had to refinance her house in order to pay for health-related improvements.

“If I lost my home, I would die,” she said, “I don’t know how I would live.”

Cedeno, who is arthritic, uses a wheelchair and has poor eyesight, lives with three of her five children and her husband in the four-bedroom, two-bath home she purchased in 1998 for $57,500 on a 30-year fixed loan.

But in 1999, Cedeno took a $20,000 second loan on her home that came with a 19-percent interest rate. Then she refinanced the house in December 2006 for $173,000, to make home improvements critical to her health and physical condition.

While her children are now in their 20s (two have relocated), the three living with her have been unemployed for nearly two years, as has their father. No one in the household is receiving unemployment benefits.

While Cedeno has struggled with economic hardships before, the major difference this time around, she said, is their significantly lower income, mostly from government aid and sporadic jobs. She receives disability compensation of $748 a month compared to the family’s previous total welfare income of $3,600, for her five children, when she first purchased the home.

“I never had a stable place. At one point, I was in a one-bedroom trailer with five kids. I said, ‘never again will this happen.’ ” she said.

When she took the second loan, Cedeno became trapped in debt. Her monthly payment climbed from $450 from $658 to $1,108. She said she never missed a payment and made all possible sacrifices to keep her home, including not buying her children or herself any clothes or gifts. She also delayed utility and car insurance payments. Her husband was out of work and was not receiving unemployment benefits.

But Cedeno’s children “started growing up, and money started going away,” she said. She added she “was losing money faster than getting it.”

The loan and refinancing funds were needed for improvements, such as removing mold from nearly every room and installing handrails.

“I kept getting sick and ended up with asthma, infections in the chest, bronchitis,” Cedeno said, adding that their other bathroom still has mold.

When she refinanced her home with the help of her eldest daughter in December 2006, Cedeno’s monthly payments immediately decreased to $900. But that sum doubled two years later. Her lender, American Home Mortgage, said it couldn’t help, so she paid an independent agency $2,000 for a loan modification she got the same year.

The payment went down to $1,250, and Cedeno’s children, employed at the time, helped her. Her daughter got a second job to help.

Now that Cedeno doesn’t have that same support, she says another loan modification is critical to keep her home, and she can’t pay any one to help her. Her disability check decreased $16 this month, “and even $10 makes a difference,” she said.

Cedeno started working this year with the Neighborhood Assistance Corporation of America to help her with another modification.

What Went Wrong

Donald Barlett and James Steele are revisiting America: What Went Wrong, their landmark 1991 newspaper series, in a new project with the Investigative Reporting Workshop. Over the next year, the project team will examine how four decades of public policy has shaped America's ongoing economic crisis.


Back Story

The authors talk about What Went Wrong

Donald Barlett and James Steele talk about the project, and why they decided to revisit a book they wrote two decades ago, in a series of video clips produced by the Workshop.

Nation's Story

Who pays the taxes?

Who pays the taxes?

We feature charts, maps, photos and other visualizations that reflect the state of the economy as part of our What Went Wrong project. This column chart shows the growing disparity between what individuals and corporations pay in taxes. In the 1950s, the difference was 22 percent. Recent figures show the difference is 62 percent.

Rags to rags: Economic mobility hard to come by

New Pew Center on States report confirms that moving up the American economic ladder is difficult, even though most people have more income than their parents.

Homelessness takes it toll on Florida's youngest

Florida, as a center of the housing boom, still struggles to recover from the Great Recession. Financial stresses and widespread foreclosures have placed families in precarious situations, resulting in a spike in child homelessness. Susannah Nesmith reports in the Broward Bulldog.

Older workers face challenges in Silicon Valley

An advanced degree and experience in the tech sector should be a ticket to a job in today's economy. But older workers in the heart of the new economy, Silicon Valley, are finding their resume is not the issue. Aaron Glantz reports in The Bay Citizen.

 Subscribe to the RSS Feed

Read an Excerpt

The Betrayal of the American Dream on Google Books

The Betrayal of the American Dream on Google Books

Check out the first chapter of Barlett and Steele's 2012 book here.