Drawn into real estate frenzy - Part 2
A neighbourhood finds loans too good to be true
By Adam Geller - Associated Press
Frances Darden dreamed of buying a house. And not just any house.
It would be in Boston, because this was home now. But it would look and feel like her grandparents’ place in the South Carolina of her childhood, because that’s what home meant.
It would have a backyard for barbecues and a front porch for conversation. Its French doors would usher visitors from living room to dining room. It would not be a grand place, mind you, but thinking about it made Darden feel just grand.
Still, it was lot to imagine for a hair stylist on disability, reliant on a subsidized housing voucher and supporting two teenagers. Banks told Darden to scale back her dreams, offering to lend, but not enough to buy in her own neighbourhood.
Then, in September 2004, she spotted an ad in the weekly Banner.
“Want to Buy a Home? Credit Less Than Perfect?” beckoned one of what would become a series of ads by Champagne & Associates, a real estate agency in her neighbourhood of Dorchester. The slogan above the agency’s name made Darden optimistic.
“Let’s Make History,” it said.
Darden went to Champagne’s free seminar with her friend, Annie Neal. It was held in the agent’s office, facing a traffic-filled avenue, between a storefront daycare centre and Linda’s African Braiding & Clothing. Agents had pushed the desks back to the green stucco to make room for an audience. The prospective buyers met two women who vowed to help them.
The first was Champagne’s owner, Roberta Robinson, a former mortgage broker who’d started her own real estate shop.
“She had an answer for every question,” Darden says.
The second was Rachel Noyes, a bartender-turned-mortgage broker who brought her toddler to some seminars, and promised to unlock the secrets of buying real estate.
“I really felt like I was helping people get into homes,” Noyes said in a recent telephone interview. “The one question I always asked, to drill into your mind, is: How much can you afford?”
But those who attended the seminars — describing the experience in interviews and court papers — don’t remember it that way.
“As long as you’re honest with me,” Valerie Hayes recalls Noyes saying, “I guarantee you I can you get you into a loan.”
At session’s end, organizers asked for Social Security numbers to run credit checks.
“We’re not going to be approved to buy a home in Boston and I don’t want to go out to Lowell,” Darden recalls thinking.
But a couple of days later her phone rang. It was Robinson — with good news.
Darden had been pre-approved for a loan. Up to $360,000!
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It only took a few weeks for Frances Darden to find her dream house — a two-family set on a corner of Harvard Street with pale yellow siding, a small front porch and another on the back. But could she afford it?
Darden says Roberta Robinson calmly reassured her.
“I have always been about educating the consumer regarding real estate since I hit the scene,” Robinson wrote of herself in an advertising directory. “I feel the first step in homeownership is working with an informed client.”
Robinson did not return calls and her attorney declined to comment.
When another bidder pulled out of a deal for the house, Darden says Robinson called with more good news.
“She said, ‘You have some good credit, girl, because you got approved for two houses,”‘ Darden recalls.
“How is that possible?” wondered Darden, who says she first told the agents she could afford only $1,500 to $2,000 a month in payments.
Renters, she was told, would help her carry the load of her own home, and the costs would be further offset by a three-family rental property.
Soon, mortgage applications —almost entirely blank — arrived in the mail. Darden signed and returned them. In November, Darden closed on the first house. In December, she closed on a second.
She’d been pre-approved for $360,000. Now she was borrowing $894,000.
It would cost her $7,194 a month.
It wasn’t until seven months later, though, after she struggled to find tenants and maintain the buildings, that Darden began to wonder just what had happened. It began to make sense only when she studied the finished paperwork.
When she bought, Darden was receiving $1,800 a month in disability payments — as she recovered from a collapsed lung — sometimes supplemented by child support of $150 a week.
But the mortgage application described a woman she did not recognize: an administration manager for a medical supply company, earning $114,000 a year.
Meanwhile, the real Frances Darden was quickly falling behind.
In June 2005, Darden says she went to the Champagne office to demand help in refinancing her loans. By now, though, the effort to recruit buyers had outgrown the space on Blue Hill Avenue and moved to the church. Some of the sessions were drawing 40 or 50 people.
Robinson tried to help her sell the second home. But Darden was going through a divorce, tying up the home’s ownership. She was and falling farther behind.
Now it had been a year since she’d become a homeowner. Long enough for the lender to lay claim to the investment property and begin foreclosure.
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