Marie Lewis had the American dream. A nice home in Greensburg, Pa., a husband with a good career and three children. So, when a financial advisor told the couple to refinance their home into an adjustable rate mortgage to pay off some old credit card debt, they figured it would be worth the risk.  

Lewis and her husband figured their income would increase and the high percentage rate that would take effect on their mortgage payment in a few years wouldn’t be difficult to pay, right?

Wrong.

After Lewis’ husband, Don, lost his job and the interest rate on their dream home began to skyrocket, the family ended up in a two-bedroom apartment in Florida.

“We thought we could play the game,” Lewis said.

The Lewis family is just one of the two million families affected by the rising interest rates on adjustable mortgages.  

And, considering that President Bush’s housing crisis solution to freeze rates for five years only helps those who never missed a payment on the lower interest rate, just about 10 percent of the two million are actually gaining relief.

Stack that on top of the fact that sub-prime (also known as adjustable or fluctuating) mortgages are heavily concentrated in Black and Hispanic neighborhoods and the crisis becomes disproportionately poor and Black.

In 2002, Black Enterprise magazine reported that Blacks are four times more likely to have or be solicited for subprime mortgages than whites; Latinos were two times more likely.

The Lewis,’ who are a middle-class family, said they were tricked into thinking their income would increase, but the adjustable mortgage reasoning is based on a lot of what ifs and not reality.

“It was like if all these things happened we could afford the mortgage,” Lewis said.  But in July, after her husband was laid off, Lewis knew that her payment would be late by October.

Damon Carr, a mortgage and money consultant, said the likelihood of a steady increase in income for most is unrealistic.

“If your income doesn’t rise every six months, why would you want the home (mortgage) above your head to rise every six months?” Carr said.

Subprime mortgages can begin as low as 6 percent and rise to 12 percent within five years. This leaves anyone on a fixed income or average job with payments they can’t afford, specifically the elderly and poor.

Carr said many Blacks are so used to being turned down by banks they often forget to read the fine print when accepting a mortgage and get themselves into dire circumstances.

Lewis said although she and her husband were prepared buyers, she was not prepared to deal with a major mortgage company.

“I started calling the mortgage company [Countrywide Financial] and no one would even talk to me. They told me to call back when I’m late,” she said. Lewis tried contacting Countrywide three months before she knew she’d be late.

Carr said this is often the case with large housing companies.

“They figure if they’re getting their money, they’re cool. They have to deal with people who are already being foreclosed on, so they’re not as worried about you,” Carr said.

After trying unsuccessfully to get help from Countrywide, the Lewis’ decided to short sale their home. This is when the homeowners agree to sell the house for less than what it’s worth and have the difference counted as income on their taxes.  

Although the Lewis’ were able to get out of the house with their sanity, and little else, Carr said there are some basic financial principles that can help anyone stay away from predatory lending.

“Get your financial house in order first, then seek homeownership; never get a mortgage payment that exceeds 35 percent of your take- home pay;  and never take an adjustable rate mortgage,” Carr said.