It's not that I don't have opinions about other issues i.e. global warming, the fate of the Euro, the BP Deepwater Horizon fiasco off the coast of my beloved New Orleans, the CLEARLY blown call at first base that cost Detroit Tigers pitcher Armando Galarraga his earned perfect game, and more. Nor is it that I don't keep up on those issues, I try to keep up on the latest of a host of issues getting information from myriad sources on-line (I'm hooked on "Politico.com, reading the Boston Herald and the Boston Globe (which I used to subscribe to when I lived in Boston)), The Wall Street Journal, The Economist, Scientific American and Nature ... I really try to keep up. But real estate is what I know best and feel in my bones (well, sometimes it's the arthritis in my knees .... but besides that) and it's real estate I'd like to stick with when possible. Fortunately, in the midst of a fallow period at the Globe, their corporate parent "The New York Times", presented me with a piece of lying, half truth, leaving out pertinent facts, garbage story on Boston real estate that really demonstrates how little they care for the facts, especially when it might interfere with their do-good dogma.
I was googling some information on mortgage foreclosures when I stumbled upon an article that ran in the New York Times on March 21, 2010 titled "Finding in Foreclosure a Beginning, Not an End" by John Leland.
Those of you that have been with me a while will recognize the misinformation fairly quickly. In Mr Leland's essay he gives us examples of persons who, we're led to believe, acted in good faith to resolve defaults and foreclosure issues with the banks that held mortgages that, given the collapse of the real estate market (especially in minority urban areas) now had principal balances well in excess of the value of the secured real estate. In some cases the homes were worth half of the mortgage balances.
While the banks played "hardball" when negotiating prior to foreclosure, now that the foreclosures had taken place and the banks (or mortgagees) had taken possession of the properties, those foreclosed (prior) owners that had not moved out of their former homes, or who were fighting their evictions, had more leverage now then before the actual foreclosure (of course, nowhere in the article does it mention that they're being foreclosed because THEY WEREN'T PAYING THEIR BILLS!!!). And now, these persons have powerful allies like ".. Boston Community Capital, a nonprofit community development financial institution, and a housing advocacy group called City Life/Vida Urbana, working with law students and professors at Harvard Law School."
So, who are these do-gooders helping? The first two words in the article introduce us to Jane Petion who owned her home at 3 Cardington Street in Roxbury and saw the value of her house rise for 15 years before ".. the housing bubble burst, .. (prices) .. plunge at a sickening pace that left her owing $400,000 on a house worth closer to $250,000.
Fortunately Boston Community Capital is able to put together a deal where the property was purchased from the mortgagee, then they sold it back to Ms Petion for $286,875 (64% less than the original principal on the foreclosed mortgage .... NOT including unmade payments, principal, penalties and legal costs) and financed with a mortgage to Aura Mortgage Advisors, a non-profit mortgage lender, for $279,000. Ah, bliss. Out of uncertainty and despair ... peace and stability. Ain't liberals wonderful?
Further we learn of Ursula Humes. Ms Humes is a "transit police detective" (MBTA) who's $440,000 mortgage now dwarfs the value of her home after the real estate market crash. She has been foreclosed and has now gotten her notice that she will be evicted in 48 hours. Her boxes are packed and she's hoping for a miracle ... one that, despite every effort of this subset of "do-googer nation", isn't going to happen. Though the mortgagee had agree to sell the property to Boston Community Capital for $260,000, after further "... assessing Mrs. Hume’s finances, the nonprofit asked for a lower selling price, and the lender refused. "
"Many commercial lenders, similarly, would shy away from such a program because it involves writing mortgages for borrowers who have already defaulted once — a high risk for a small reward.", the Times tells us. (Italics and color accent mine)
(There is also one other person listed, Roberto Velesquez, who's story is not nearly so misrepresented, so I won't spend any more time on it.)
So, by now, some of you are asking yourselves "Just how complete a misanthrope must Anderson be that he knocks people helping those that have been foreclosed, considering ALL of the economic dislocations that have taken place during this "Great Recession"?" (Misanthrope?? you can fill in the adjective of your choice)
So lets start with the poor Jane Petion. As I've mentioned before, if there is a name or an address I go right to the pertinent registry of deeds, here Suffolk County. It's here we learn that Ms. Petion's mortgage which was foreclosed was originally for $448,000 to SLM Financial recorded on 05/20/2005 and was secured by the real estate at 3 Cardington Street in Roxbury (near Egelston Square). But it wasn't her first mortgage on the property, nor was it her second .. or third ... or .... it was her 7TH!
You see, the reporter, John Leland nor any of the editors at the Times that reviewed the article, seemed to think it was important to let the reader know that Ms Petion purchased the above noted two family house way back on 10/31/1994 for the earth shattering price of $43,000 (Book 19414 Page 079) with a low down payment do-gooder mortgage to Bank of Boston for $40,850 (95% L/V) In the early 90's prices rose slowly but as they started to rise faster, Ms Petion was able to start using her home as an ATM ...... and she did with a vengeance!
Normally I'd give a running narrative about the mortgages she gets but, to save time writing (and you reading), I'll just list them so you can see why Ms Petion's foreclosure plight leaves me less than sympathetic:
10/29/1997 Citizens Mortgage Corp. $82,000
05/06/1999 Citizens Mortgage Corp. $23,000 (2nd Mortgage)
12/05/2000 Massachusetts Co-op Bank $130,000
09/30/2002 Wells Fargo Home Mortgage $200,000
05/27/2003 Wells Fargo Home Mortgage $304,000
11/24/2004 Wells Fargo Home Mortgage $360,000 and finally
05/20/2005 SLM Financial Corp. $448,000
So The New York Times didn't seem to think that, the fact that Ms Petion cashed out $407,250 in mortgages TAX FREE (less closing costs) and still didn't pay her mortgage which lead to her being foreclosed, might be a pertinent part of the story? I don't know how you felt before, but I'll bet you feel a lot less sorry for her now! This is not a person deserving of sympathy, and certainly not deserving of the assistance of scores of do-gooders .... she a deadbeat!! a stiff!! a bum!! AND I'd like to know what the hell ever happened to the $400,000!!!!
But believe me, we're just getting started with Jane Petion.
You see, while she was spending $400,000 of tax free money, she also bought a piece of investment property at 36 Cobden Street just around the corner from her home. She (or a person with the same name who's signature on the mortgages look identical to her's) bought the three family house on 06/29/2005 for $375,000 (37431/125) with piggy-back mortgages to (the previously mentioned) SLM Financial Corp. totaling $365,250. (95% L/V) Unfortunately, (I know you'll be shocked by this ... where's Claud Rains when we need him?) she wasn't a whole lot better at paying the mortgage on her investment property and lost it to foreclosure to the mortgagee, LaSalle Bank, Trustee, on 01/20/2009.
No I'm not done ... you see she also used 36 Cobden Street as an ATM!!! She borrowed:
$371,000 from SLM Financial on 06/29/2005,
$388,500 from Prime Mortgage Financial on 07/31/2006,
$471,750 from Prime Mortgage Financial on 10/20/2006 (two piggy-back mortgages)
before losing the home to foreclosure. So this time she walks away with an additional $106,500 dollars (before closing costs). That means she cashed out more than a half million dollars!!!! and still didn't pay her bills!!!
How could ANY thinking person believe that is some sort of victim that needs to be helped to buy her home back? She does need help ..... help to learn how to pay the bills she agreed to take on and promised to pay back. She might also need psychiatric help .. but that's for others to determine.
And I know you were afraid I was going to say this ..... "But wait!!! There's More!!"
One of the things I didn't mention was that Jane purchased 36 Cobden Street with Ricardo Petion. The deed for Cobden Street refers to them as "tenants by the entirety" so they must be husband and wife, but that throws another wrinkle in the plot line. You see, while Jane Petion owned 3 Cardington Street, Ricardo Petion owned 2 Cardington Street, a different 2 family home directly across the street !!!!! I swear .... you can't make this shit up!!! And it gets even better.
Ricardo Petion purchases 2 Cardington Street from Paulette Johnson (aka Paulette Partin aka Paulette Martin) for $128,000 on 02/21/2001 (26532/200) with a mortgage to GMAC Mortgage for $159,850 (I have to assume it was a purchase money mortgage with construction funds to improve the property ...... or something else that could be perfectly legit!) I know that you'll again be shocked, just SHOCKED to learn that Ricardo is not very good at paying bills either and he loses 2 Cardington Street to foreclosure on 03/19/2008 (43271/018).
Now your probably saying , "No, he didn't?" ... but I have to add, not only did he ... but, because of several $1.00 deeds between them, he and Jane Pation, cashed out more money in the form of the following mortgages:
12/19/2002 New Century Mortgage Corp. $205,000 and
12/02/2005 SLM Financial Corp (Look familiar?) $371,000.
So these two deadbeat's cashed out $734,900 .... that's right ... ALMOST 3/4 OF A MILLION DOLLARS (less closing costs) ....... spent the money on god knows what ....... then they're helped by the above mentioned "sitting at the right hand of the father" do-godders to buy their home back. In fact .. it's kind of sweet in that, after $725,000 spent, they're finely together as joint owners of the same home, 3 Cardington Street. Kind of nice and homey .... and I think I'm going to puke.
All you people out there that didn't take those vacations you really wanted because you were being frugal, or perhaps the extra job you took to make enough money so you didn't succumb to the temptations of using your home as an ATM, Jane and Ricardo Petion just showed you how big a fool and what suckers you were!!!! You could have spent every penny like they did, you could have had vacations ... cars.... spoiled your kids rotten ... (a little sweetie on the side maybe?) anything you wanted and Boston Community Capital, etal, would have helped you buy your home back at a fraction of the last mortgage!!!! (And the left thinks Wall Street perverted capitalism??)
And the New York Times didn't think ANY of this information was pertinent to the story ....... or would it have been inconvenient to the paper's ideology?? ..... or did they check anything at all?
Please don't worry ... Ursula Humes doesn't have as long a story but almost as perverse. As I mentioned above, despite all of the efforts of do-gooder nation, Ms Humes acquiesces that, “I depleted my retirement account and everything I owned, but I’m still going to lose it.” Dave Grossman, director of the Harvard Legal Aid Bureau adds, "This is a case that doesn’t have a happy ending,”.
So what was so special about Ms Humes case that SHE couldn't buy her house back? There could be a thousand different issues but the article mentions one that I'll address. Though the article mentions that lenders are not really happy to be lending to "... borrowers who have already defaulted once ..."(remember .. the italics and highlight color is mine), but since the program is set up to help people buy back their homes after they have been foreclosed ... EVERYBODY in the program must have defaulted ONCE! So let's look at Ms Humes' case.
Ursula Humes lost her large single family home at 18 King Street with a foreclosure deed recorded on 05/22/2009 (44967/099) because of her default on her mortgage to Wells Fargo Bank, NA for $440,000 and recorded on 05/31/2005. Now, I'm sure I won't surprise you by pointing out that this was not a "purchase money" mortgage .... of course, it was a refinance "cash out" mortgage ....... like the 6 mortgages before it!!
Again, we have a person who, instead of being careful and frugal, used her home as an ATM, spent every dollar that came in for everything but (obviously) paying her bills and lost her home because of nothing other than their own deadbeat behavior.
She purchased her home on 06/10/1994 for $129,000 financed with a mortgage to Shawmut Mortgage Co. for $129,000.* Again, I'll spare you my usual pithy narrative and just list the "cash out" mortgages and other "interesting" public documents:
05/30/1995 Bankruptcy (That didn't take long!)
03/27/1997 Intent to Foreclose Mortgage
04/20/1999 Intent to Foreclose Mortgage
05/23/2000 Intent to Foreclose mortgage to Beneficial Mass Inc. (What?)**
09/06/2000 First Franklin Mortgage $170,000
12/07/2000 Lien Boston Gas Company $8,707 (What other bills aren't being paid?)
01/26/2001 MBTA Employees Credit Union $200,000
02/20/2001 MBTA Employees Credit Union $24,500
10/18/2001 Beneficial Massachusetts Inc. $15,000
05/06/2002 East-West Mortgage Co. $256,000
10/16/2002 MBTA Employees Credit Union $300,000
12/22/2003 Washington Mutual Bank FA $375,000
05/31/2005 Wells Fargo Bank NA $440,000
Again .. another dead beat that cashes out and spends $311,000 (less closing costs) and again isn't paying her bills! Now remember, the Times article gives the information that she is a detective at the MBTA. Nobody is going to confuse an MBTA salary with that of an investment banker .... but a nice union gig for the "T" is nice upper "blue collar" ... lower "middle class" paycheck so, she spent more than $300,000 IN ADDITION TO WHATEVER SHE EARNED AT THE "T" .. AND CLEARLY SPENT.
We also know that she cleaned out her retirement and STILL she wasn't paying her bills. WHERE THE HELL DID ALL THE MONEY GO!!!!!
Now, of course, she didn't get a new mortgage and couldn't buy her house back ....... WHAT MADE ANYONE THINK SHE SHOULD!!!!!
And you were afraid I was going to say it ..... "BUT WAIT .... THERE'S MORE!!!"
You see, in the early 1990's, not only were banks being hammed for not lending in minority areas, they were being brought to task for those that (allegedly) didn't have access to "traditional" banking so sought out the lenders that were sort of "pre-subprime". This included the Main Street (but high cost) lenders like Beneficial Finance and Household Finance (HFC), but also a wide array of lightly regulated lenders the do-gooders thought only small step up from loan-sharks. Because of this banks were encouraged (really extorted) to give those that lost their homes to these ersatzes loan-sharks another chance, that brings us back to Ursula Humes.
You see, while John Leland and the New York Times point out that lenders don't want to deal with mortgagors that have defaulted "once" ... they conveniently fail to tell us that Ursula Humes had been foreclosed on TWICE!!!!! (Was that an oversight ???? I don't think so. They either "conveniently" overlooked it ..... or simply didn't bother to check anything. You know, when god whispers in your ear .... why check the details? Did Moses check to see if the Red Sea would open??)
Ms. Humes' first home purchase was at 23 Duke Street in Matapan that she purchased on 02/09/1987 for $100,000 (13394/003), along with co-buyers Craig Humes and Hilda Johnson, with a mortgage to Home Owners Federal Savings & Loan for $95,000 (Aren't we told over and over again that banks weren't lending in black neighborhoods ..... and if they would they were requiring large down-payments??? I guess this is just another in a LONG list of anomalies. Because the do-gooders couldn't be wrong ... could they??? Or do they just lie?
And again .... I'll just list the recorded detail:
11/18/1987 Financial Statement BayBank Norfolk (replacement windows) sadly, almost a guarantee of a future foreclosure.
03/16/1988 Lien Baybank Boston NA (default of replacement windows loan)
05/01/1990 Intent to Foreclose Mortgage
01/18/1992 Lien Household Finance Corp. $5,099 (unsecured debt)
08/18/1992 Intent to Foreclose Mortgage
So here we have the ultimate perversion of home-ownership .... deadbeats that lose their homes time and time again .... deadbeats that cash-out more than $700,000 and spend it on whatever and DON'T pay their bills ..... and they are helped by do-gooders because of ...... what????? Because they're victims? Of what .. their own stupidity? Wait .... maybe WE'RE the stupid ones?
You want to see examples of why minority neighborhood fail to prosper ..... this is it!!! ... and this systemic economic failure is enabled by half wit do-gooders who don't seem to have clue what they're doing except that they know it's "right"!
When did our noble desire to help ..... to help the weak .... to help the downtrodden ... to help those that have been all too clearly discriminated against, or even those who just never seem to get a break, trans-mutate into helping people that have been handed what they need .... and then piss on and destroy that which they got from our help. When did helping the disenfranchised become helping those that were skillful enough to walk away with $700,000 in cash but end up not paying their bills and losing their TWO HOMES AND THEIR INVESTMENT PROPERTY. I don't remember that being being how we determine who needs to be helped!! And the woman that lost TWO homes to foreclosure because she didn't pay her bills, but sure as hell knew how to flush cash out of her homes. IS THAT A NEW PROTECTED CLASS!!!
When did our noble desire to help ..... to help the weak .... to help the downtrodden ... to help those that have been all too clearly discriminated against, or even those who just never seem to get a break, trans-mutate into helping people that have been handed what they need .... and then piss on and destroy that which they got from our help. When did helping the disenfranchised become helping those that were skillful enough to walk away with $700,000 in cash but end up not paying their bills and losing their TWO HOMES AND THEIR INVESTMENT PROPERTY. I don't remember that being being how we determine who needs to be helped!! And the woman that lost TWO homes to foreclosure because she didn't pay her bills, but sure as hell knew how to flush cash out of her homes. IS THAT A NEW PROTECTED CLASS!!!
I read a long time ago that "perverse incentives are incentives for perverse behavior". Helping habitual deadbeats and "stiffs" .. is an incentive for people to be, deadbeats and "stiffs". Welcome to contemporary urban America.
*(PLEASE NOTE: At this time Banks were still reeling from the 1992 study by the Federal Reserve Bank of Boston that purported to clearly show that banks were discriminating on the basis of race when it came to approving mortgages in the metropolitan Boston area (AGAIN PLEASE NOTE: The Fed study ONLY looked at Federally charted lending institutions ... not all lenders). In this environment there were hosts of organizations like Bruce Marks' UNAC (now NACA), ACORN and many others that were trying to get banks to cooperate with them so they could act as "originators" for the mortgage lenders. Though Bruce Marks later became famously (or infamously) associated with Fleet Bank, some his earliest "test" mortgage originations were with Shawmut Bank and a few of those were 100% L/V mortgages. Though this LOOKS as if it might be an UNAC originated mortgage ... the lack of any documentation to that effect makes it imposable for me to state that it is or it isn't ..... though it looks like other similar documented UNAC originated mortgages. Further, at least two other properties were purchased by this speculator and flipped to buyers that definitely were buyers who's mortgages WERE originated with UNAC, at big profits to the seller with accordingly larger mortgages to the "helped" buyers. See "Shocking" Round up the usual cliches ... er ... suspects.)
