Florida Mortgage Company Accused of Application Manipulation
A Miami couple says a Florida mortgage company affiliated with Fort Myers-based First Home Builders altered information to enhance their financing application without their knowing it, hikinh up the value of their residence and length of time the husband had been at his job.
Increasing the home value and job stability would enhance someone’s chances of getting the loans required to purchase real estate.
Officials with K. Hovnanian Enterprises, the parent company of First Home, said their own employees did nothing wrong and the mortgage company, Builders Mortgage LLC, is the responsibility of Wells Fargo — Hovnanian’s partner and 51 percent owner in the joint venture.
However, David Martin, the Builders Florida home loan officer who handled the couple’s application, said Friday: “I’d like to refer all questions to Hovnanian’s legal staff,” specifically general counsel Peter Reinhart.
The couple, Cedrick Walta and his wife, Sandra Chen-Walta, tried three lenders but weren’t able to find one that would finance the three Cape Coral houses they signed up to buy from First Home in July 2005 with a down payment of $12,500 on loans totaling $766,382.
“We can’t get a loan and so we can’t close on the homes,” Chen-Walta said.
In a March 6 e-mail to Chen-Walta, Martin said he would submit a Florida mortgage application to a lender so the Waltas could buy the houses. The Waltas declined, however, because of the alleged altered paperwork submitted at the July 2005 meeting.
The Waltas said they didn’t notice until going through paperwork after the meeting that alterations had taken place. “We decided we weren’t going to use them because of the fraud they perpetrated on us,” Chen-Walta said.
Larry Sorsby, chief financial officer for Red Bank, N.J.-based Hovnanian — which bought First Home in August 2005 — said the Waltas and others in similar circumstances are crying over spilt milk and should honor their obligations.
“What’s happening in the Fort Myers market is we’ve had an unprecedented fall in the real estate market in a year’s course of time. These individuals were bullish on the [Florida housing market]; now they’re trying to find some way not to proceed with the transaction because of an unanticipated drop in prices.”
He noted the Waltas successfully purchased three other First Home houses before getting into trouble with the three now at issue. But Marc Savitt, vice president of the National Association of Realtors, said he’s reviewed the documents for the Waltas’ case.
“This is clearly abusive lending,” he said.
The changes in the Florida mortgage loan application, he said, only make sense as an attempt to improve the apparent financial situation of the couple to improve the chances of their getting the loan. “That was all to better qualify.”
Savitt said he’s spoken with about 20 people in the Fort Myers area who were victims of predatory lending, and the situation here is “the worst I’ve seen in years.”
His role in the association is to investigate situations like this and try to get back people’s money, Savitt said.
But Sorsby said Savitt’s motives are not altruistic in attacking builder-affiliated operations like Builders Mortgage — which are not mortgage brokers.
“Mr. Savitt has a definite agenda,” Sorsby said. “His trade association has had a stated agenda for a number of years because they reduce the amount of business for mortgage brokers.”
It’s unlikely the changes in the application would have affected the Waltas’ no document loan, which didn’t require accompanying documentation, Sorsby said, despite “allegations that someone consciously or unconsciously made a mistake.”
SOURCE: The News-Press
