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Grant lets students investigate predatory loans in St. Clair County

By Mike Fitzgerald , Mon, Jul. 22, 2002
Belleville News Democrat

Kate Crowley, 25, and Justin Placek, 22, two graduate students in urban planning from the University of Illinois, spent five days last week hunkered down in a windowless file vault at the St. Clair County Circuit Clerk's office.

Their mission: to pull a representative sample of 500 or so case files from home foreclosure lawsuits filed in the county from the past five years and enter key data from each lawsuit into a pair of laptop computers lugged from their Champaign-Urbana campus.

Their work could pay off in a big way. For starters, it could for the first time provide an in-depth understanding of the factors causing home foreclosures in St. Clair County. This information could be used to reduce foreclosures and help low-income families hang onto their homes.

Crowley and Placek's field trip to St. Clair County took place courtesy of a $85,000 grant the U.S. Department of Housing and Urban Development awarded to St. Clair County. The grant's purpose is to study the patterns behind predatory lending -- defined as money loaned out at excessive interest rates and fees -- and to teach home buyers how to spot and avoid it.

``The idea is to show there is a problem in St. Clair County,'' said Diane Thompson, a staff attorney with Land of Lincoln Legal Assistance Foundation in East St. Louis, which has helped scores of residents in legal battles keep their houses.

Once the information culled by Crowley and Placek has been analyzed, Thompson said, ``The idea is to use this information and go to bankers and say, `There really is a problem here in St. Clair County.'''

Also taking part in the project are the Neighborhood Technical Assistance Center of East St. Louis and the Metropolitan St. Louis Equal Housing Opportunity Council of St. Louis.

The catalyst for this research was the realization that a national problem had reached St. Clair County, said Ken Hise, who runs the county intergovernmental grants department.

``And in Illinois they had found in Chicago, and some of other places, there are a number of instances where people were paying higher-than-usual interest rates and fees in refinancing and first-time borrowing,'' Hise said.

Another spur behind the research is concern about the hundreds of vacant houses in East St. Louis and nearby poor neighborhoods.

Stemming the rate of foreclosures that result in vacant homes would be a boon for surrounding neighborhoods, said Lynne Dearborn, the project director and an assistant professor of architecture at the University of Illinois.

After crunching the data downloaded from Crowley's and Placek's computers, researchers might see links between home sellers and banks, as well as ``some of the routine things that predatory lenders put into contracts,'' Dearborn said. ``So we can go back and do some consumer education and say, `Here's the kind of things you need to be careful about.

''' The county's predatory lending project will focus on home loans and loans taken out by customers of home repair firms, Dearborn said.

The project is taking place 15 months after the Belleville News-Democrat began publishing stories based on an investigation of property flipping in the East St. Louis area.

Property flipping is a scheme in which sellers buy ramshackle houses and resell them quickly, inducing poorly educated buyers with bad credit into taking out high-interest loans. The loans usually are based on falsified information appearing on appraisal reports and loan applications.

Marvis ``Swamp Dog'' Bownes and his son, LaMarco Bownes, have bought scores of homes in East St. Louis and sold them at vastly inflated prices, according to the News-Democrat's investigation.

The Bownes' customers almost always default on the loans, and their houses usually end up in foreclosure, according to the News-Democrat investigation.

Marvis Bownes is the proprietor of a pair of real estate firms: Peach & Pep Construction Co. and MLM Works Inc.

On Thursday, federal and state investigators assisting a probe coordinated by the U.S. attorney's office in Fairview Heights raided Bownes' office at 8517 State St. in East St. Louis and seized records.

Bownes has not been charged with a crime. --

Last modified: 30 July 2002, JeongYoon Park