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Gertrudis Cortez's house has seen better days, but it's bustling with life: overgrown potted plants, barking bulldog, clucking chicken, gobbling turkey; Busch cans, hammock, shell of a Toyota van; diapered toddler, wobbling in the doorway, staring blankly past his grandmother at the construction on Lyons Avenue.
Cortez emigrated from San Salvador about 20 years ago. She signed a contract for deed on the house in 1994, the year after her husband died.
"I was left all alone," she says in Spanish, "so then I came and I got this house."
She financed the small duplex for $24,000, she says, so she could bring her son and daughter to Houston. Now the 70-year-old factory worker has three adults and five kids living with her, an enclave of strivers and learners making their way in a half-painted house snuggled up next to an abandoned service station in the Fifth Ward.
They're living the American dream, save for one problem:
After paying out more than $37,000 over 12 years, Cortez has reduced her principal by only $3,500.
"We're never going to finish paying for it," she says. "All our work for nothing."
Although the contract Cortez signed was written in English, all the terms were negotiated in Spanish. She was told her payments would remain level at $225 a month, she says, and no mention was made of escrow or insurance.
She says five families have gone through the house next door, suckered by the same deal. Their payments remained steady at first, but once they started making improvements to the house, back payments for escrow were demanded and the families had to pack up and move on.
"It's just theft," she says. "Nothing but theft."
Alain Cisneros, a local organizer for the Association of Community Organizations for Reform Now (ACORN), has heard all of this before. A few years ago he was canvassing the Third Ward when he met a Latino family who told him they were unsure what exactly was going on with their house. Cisneros didn't know much about real estate, but he took a copy of their contract and promised to have a look at it.
A little while later, he was cruising around the Fifth Ward when he found a little barrio of immigrant families, many voicing the same concerns as the first. Cisneros and another organizer began poring over the contracts, and they found one glaring similarity: Jack Markman, a real estate investor who has a part in several local companies that, according to his attorney, own more than 800 properties in the Houston area.
Cisneros began tracking down other people who'd dealt with Markman and his associates.
"I knocked on doors for three months, looking for the families, and it was the same: all Hispanics, all living in African-American neighborhoods," he says in Spanish. "They didn't know if they were going to own their homes. And that's how the campaign was started."
This campaign took ACORN and some of the families all the way to Austin, where they successfully lobbied for a bill that drastically changed the way contracts for deed work. The changes in the law went into effect September 1 of last year.
But that's just the beginning.
Six weeks ago a lawsuit was filed on behalf of Gertrudis Cortez and seven other families who financed homes from Jack Markman and his associates in the '90s. The suit was filed independently of ACORN, although all the plaintiffs are members of the organization.
The lawsuit alleges that:
• Jack Markman and his associates, William Humphries and Maria Martinez, have been preying on immigrants for decades, intentionally targeting native Spanish speakers who don't understand the language of contract for deed, a financing arrangement in which the seller retains title and all legal rights to the property until the balance is paid in full.
• Potential buyers were not told about final balloon payments, which could have been avoided in many cases had the families paid a few extra dollars a month.
• Potential buyers were not told about escrow or insurance when the contracts were signed.
• Markman and his associates often held off a few years before asking for escrow payments, letting the buyers make improvements to the houses before being told they had to catch up with the escrow. In at least one case, a family was conned into changing its contract to a lease after falling far behind on escrow payments.
• Markman and his associates have systematically misapplied payments, often not providing receipts and charging improper late fees.
In other words, the lawsuit alleges that these contracts were designed to fail, so that Markman and his associates would be able to sell the same houses over and over again.
A call to Markman's office was directed to his attorney, Melina B. Cain, who spoke at length with the Houston Pressand provided a written response.
"When you look at the true facts, you see that this is just sensationalism as an attempt to secure an unwarranted benefit," she says, which is lawyer-speak for "These folks are trying to get something for nothing."
Cain says her clients are willing to work with the families, that they have worked with the families "to get their payments low enough to where they could afford the houses, and now we're getting allegations against us that we're somehow cheating these people because they have a low monthly payment."
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