In the Cleveland area, one out of every five mortgages is subprime, and in Slavic Village subprimes account for more than half of all loans. On Wall Street, though, high risk means high returns. Investment banks buy up thousands of loans at a time from mortgage companies, pool the loans into trusts, and then resell shares in these funds to investors. Mortgage-backed securities that include large numbers of subprime loans are the most lucrative, bringing returns of up to 15 percent. Ohio isn't on Wall Street's radar: Its foreclosure disaster is just a dent in a shiny moneymaking machine. South Euclid has about 150 vacant houses; a few years ago it had about 40. It is predatory lending inflated appraisals, brazen financial companies.
Argent sells more mortgages than tany lender in Cleveland, and it took just one year to hit No. 1. Ameriquest agreed to disclose interest rates and fees up front, use independent agents at closings, and refinance loans only if a transaction benefits a borrower. Argent has a loan product for pretty much any customer: borrowers whose income isn't enough to justify a mortgage, borrowers with horrific credit scores, borrowers who want to buy a second home, who want to pay interest only for five years, who want a 40-year mortgage then later on they can not be able to stop foreclosures. Argent denies just 6 percent of applications.
Argent Mortgage defends its lending practices. "Argent takes a number of steps to monitor and select brokers. As for brokers, the company's website points out, Argent sells loans through independent agents over whom it has limited control. In Cleveland, FBI agents are reportedly investigating a single mother living in subsidized housing who bought five houses in a day, and a night-shift postal worker who bought four, all with Argent loans and all in foreclosure.
In late 2004, Ameriquest foreclosed on the property's absentee owner. Ameriquest turned around and sold the house to an investor; that investor resold it a couple of months later to Farrow. It wasn't the only Cleveland house Farrow purchased. Last year, Farrow left her boyfriend and moved with her infant son back to her mother's house. Christopher Siedlecki, who has since pleaded guilty to 14 counts of fraud, bought a house on East 53rd Street for $34,000. For $61,500, He sold it to Lawrence Reasor, in a transaction financed by a small mortgage company called Entrust. In 2003, Reasor refinanced with a $68,000 Argent loan; he went into foreclosure in March 2005.
Reasor's robin's-egg-blue rooming house is one of them. For two years now, Congress has been cutting funds for housing vouchers for low-income tenants. A week later, the day's first auction is Argent Mortgage v. Charity Stewart, et al., starting bid $36,667. Charity Stewart wasn't waiting for Argent to throw her out. When the decay started, not long after she moved in, Stewart called the mortgage company. Argent went to Cuyahoga County Court that November and filed for, to stop foreclosure. Stewart had borrowed $85,000, and still owed $84,795.87. Almost no one in Cleveland puts money down to buy a home anymore. Stewart got a $10,000 loan directly from the seller of the house, a handyman named Steve Dragmen. (Dragmen asserts that the funds were not for a down payment, but simply to qualify Stewart for the mortgage.) The house cost $100,000-more than double what Dragmen had bought it for three months earlier. Dragmen sent Stewart to an Argent broker, who informed her that she didn't earn enough to qualify for an $85,000 mortgage. "Yeah, right," says Stewart. Stewart instructs her.
At Stewart's foreclosure sale, Argent is the only bidder.
Neil
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