| The face of foreclosure: A Greenacres woman fights to keep her home |
By PAT BEALL
Palm Beach Post Staff Writer
Sunday, October 14, 2007
GREENACRES — To keep the roof over her head, cancer
survivor Deborah Tipton is squaring off with one of the
largest banks in the world.
Global powerhouse Deutsche Bank never wrote a loan on her
modest Greenacres condo. It never saw her credit score,
checked her baby-sitting income or requested an appraisal.
But the $1.3 trillion bank is suing to seize her home of more
than 20 years, which it now controls.
At the white-hot peak of the local housing market, that's how
a lot of deals got done: an unsophisticated homeowner, fast
money, fat fees, fudged records and a mortgage that found
its way into the coffers of a huge bank.
There is nothing exceptional about Tipton's case, said her
lawyer, Malcolm Harrison. He said it "mirrors so many others
just like it."
Divorce, illness and job loss have always had the potential to
trigger foreclosures. But as the housing market heated up,
the trio somehow seemed less threatening. A borrower's
inability to repay slipped into the background. Refinancings
drained homeowners' equity.
Although money was hailed as "cheap," millions of dollars in
local mortgages were burdened with double-digit interest
rates by lenders willing to overlook fundamental credit
questions.
Tipton admits her $100-a-week baby-sitting wages should
not have qualified her for a home loan in January 2006. But
when her abdomen ruptured and herniated, a life-threatening
post-cancer complication, she had no health insurance. She
needed money. After 12 lenders turned her down, Fremont
Investment and Loan Co. and QuoteMeARate.com Inc. said
yes.
In broker documents, there's no mention of Tipton's meager
wages. Instead, the paperwork says Fremont made a call to
Wyn Solution Services Inc. of Sunrise, which said Tipton
worked there as a district manager, earning $3,800 a month.
That was enough to qualify Tipton for a 10.48 percent,
$146,000 loan. The deal generated closing fees of $10,139.
QuoteMeARate got $4,500 of that, according to court papers
filed as part of a foreclosure suit.
Tipton said she never worked for Wyn Solution, never made
$3,800 a month, never served as a district manager.
Moreover, until she was served with foreclosure papers, she
never knew that this fictional job history was how Fremont
justified her loan, she said.
Such loans requiring little or no documentation grew widely
popular between 2003 and 2006, even as credit questions
started popping up in the subprime market.
Wyn Solution is a one-person corporation operating out of a
home in Sunrise, according to corporate and property
records. Its occupational license lapsed two months before
it reported Tipton worked there. The company's sole
director, Wyneata Archer, did not return calls from The Palm
Beach Post seeking comment.
Deutsche Bank, which purchased Tipton's loan along with
millions of others and sold them to investors, declined to
comment, citing the pending foreclosure. Through its local
counsel, Fremont also declined to comment.
Fremont loans started coming under fire in March, when the
Federal Deposit Insurance Corp. alleged the lender made
loans without regard to a borrower's ability to repay. This
summer, Fremont suspended foreclosure suits on 2,200
Massachusetts homeowners after state officials alleged that
it deliberately wrote mortgages for borrowers who could not
afford the loans.
Houston-based QuoteMeARate.com closed its doors in 2006
amid allegations of fraud related to certain unspecified loans.
It's not unusual that Tipton refinanced her home twice before
securing the loan now in default. Serial refinancings
bankrolled everything from new cars to big-screen TVs. The
high-interest-rate loan also is fairly typical: 76 home equity
loans or second mortgages that defaulted in Palm Beach
County in the first six months of this year commanded
interest rates of 10 percent or more.
Single women with those loans averaged an interest rate of
12 percent.
It's also no surprise that Tipton's loan wound up as a tiny
piece of an investment called GSAMP Trust 2006-FMI. It was
bundled with millions of dollars in other mortgages.
Deutsche Bank sold it as an investment, one of thousands of
such deals snapped up on Wall Street.
Other local mortgages swam upstream, too: Deutsche Bank
holds roughly $154 million in Palm Beach, Martin and St.
Lucie county mortgages that defaulted between Jan. 1 and
July 1, more than any other lender.
Palm Beach Post Staff Writer
Sunday, October 14, 2007
GREENACRES — To keep the roof over her head, cancer
survivor Deborah Tipton is squaring off with one of the
largest banks in the world.
Global powerhouse Deutsche Bank never wrote a loan on her
modest Greenacres condo. It never saw her credit score,
checked her baby-sitting income or requested an appraisal.
But the $1.3 trillion bank is suing to seize her home of more
than 20 years, which it now controls.
At the white-hot peak of the local housing market, that's how
a lot of deals got done: an unsophisticated homeowner, fast
money, fat fees, fudged records and a mortgage that found
its way into the coffers of a huge bank.
There is nothing exceptional about Tipton's case, said her
lawyer, Malcolm Harrison. He said it "mirrors so many others
just like it."
Divorce, illness and job loss have always had the potential to
trigger foreclosures. But as the housing market heated up,
the trio somehow seemed less threatening. A borrower's
inability to repay slipped into the background. Refinancings
drained homeowners' equity.
Although money was hailed as "cheap," millions of dollars in
local mortgages were burdened with double-digit interest
rates by lenders willing to overlook fundamental credit
questions.
Tipton admits her $100-a-week baby-sitting wages should
not have qualified her for a home loan in January 2006. But
when her abdomen ruptured and herniated, a life-threatening
post-cancer complication, she had no health insurance. She
needed money. After 12 lenders turned her down, Fremont
Investment and Loan Co. and QuoteMeARate.com Inc. said
yes.
In broker documents, there's no mention of Tipton's meager
wages. Instead, the paperwork says Fremont made a call to
Wyn Solution Services Inc. of Sunrise, which said Tipton
worked there as a district manager, earning $3,800 a month.
That was enough to qualify Tipton for a 10.48 percent,
$146,000 loan. The deal generated closing fees of $10,139.
QuoteMeARate got $4,500 of that, according to court papers
filed as part of a foreclosure suit.
Tipton said she never worked for Wyn Solution, never made
$3,800 a month, never served as a district manager.
Moreover, until she was served with foreclosure papers, she
never knew that this fictional job history was how Fremont
justified her loan, she said.
Such loans requiring little or no documentation grew widely
popular between 2003 and 2006, even as credit questions
started popping up in the subprime market.
Wyn Solution is a one-person corporation operating out of a
home in Sunrise, according to corporate and property
records. Its occupational license lapsed two months before
it reported Tipton worked there. The company's sole
director, Wyneata Archer, did not return calls from The Palm
Beach Post seeking comment.
Deutsche Bank, which purchased Tipton's loan along with
millions of others and sold them to investors, declined to
comment, citing the pending foreclosure. Through its local
counsel, Fremont also declined to comment.
Fremont loans started coming under fire in March, when the
Federal Deposit Insurance Corp. alleged the lender made
loans without regard to a borrower's ability to repay. This
summer, Fremont suspended foreclosure suits on 2,200
Massachusetts homeowners after state officials alleged that
it deliberately wrote mortgages for borrowers who could not
afford the loans.
Houston-based QuoteMeARate.com closed its doors in 2006
amid allegations of fraud related to certain unspecified loans.
It's not unusual that Tipton refinanced her home twice before
securing the loan now in default. Serial refinancings
bankrolled everything from new cars to big-screen TVs. The
high-interest-rate loan also is fairly typical: 76 home equity
loans or second mortgages that defaulted in Palm Beach
County in the first six months of this year commanded
interest rates of 10 percent or more.
Single women with those loans averaged an interest rate of
12 percent.
It's also no surprise that Tipton's loan wound up as a tiny
piece of an investment called GSAMP Trust 2006-FMI. It was
bundled with millions of dollars in other mortgages.
Deutsche Bank sold it as an investment, one of thousands of
such deals snapped up on Wall Street.
Other local mortgages swam upstream, too: Deutsche Bank
holds roughly $154 million in Palm Beach, Martin and St.
Lucie county mortgages that defaulted between Jan. 1 and
July 1, more than any other lender.
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