Who’s foreclosing Cleveland?

Search terms that produce 400 or more case numbers when querying the Cuyahoga County Common Pleas online database for the term (e.g. “Deutsche Bank”) as a plaintiff in civil cases filed so far in 2007:

• “Deutsche Bank” — 1,400 hits
• “Wells Fargo” — 1,257
• “US Bank” — 1,065
• “JP Morgan” and “Chase” combined — 687
• “Citi” — 638
• “Bank of New York” — 594
• “HSBC” — 544
• “Homecomings” — 443
• “Sky Bank” — 421
• “Countrywide” — 414

Remember that the foreclosing lender isn’t often the same institution that originated the mortgage in the first place. Deutsche Bank files foreclosures almost exclusively as the trustee or servicing agent for other lenders and/or mortgage-backed investment pools. Wells Fargo and US Bank (and others) are often in the same role, even though they also originate a lot of subprime loans themselves.

Some of the the county’s biggest subprime lenders, like Argent Mortgage, file very few foreclosures themselves, even though hundreds of their mortgages are in foreclosure at any given moment.

Also remember that a single foreclosure case often has multiple plaintiffs.

Map: Wells Fargo properties in Cleveland

The second most active forecloser, and second biggest holder of foreclosed properties in the city of Cleveland, is Wells Fargo & Co., headquartered in San Francisco. Unlike Deutsche Bank, Wells Fargo is a major subprime lender in the Cleveland market; it originated almost 2,000 Cuyahoga County mortgages in 2006 and nearly 900 in the first half of this year. But from January through June 2007, Wells Fargo started foreclosures on almost as many mortgages as it originated, and filed a completed sheriff’s deed for every two new mortages.

As of yesterday (October 29), according to the County Auditor, Wells Fargo held title to 443 properties in the city — up from 419 six weeks earlier.

Click on the graphic for a Google map of these properties (not including a few vacant lots without addresses).

(Map created with GPS Visualizer.)

ODB: Three Treasurers in Cleveland

Posted yesterday at Ohio Daily Blog, Jeff’s thorough coverage of the joint press conference held Thursday by the Treasurers of the U.S., Ohio and Cuyahoga County at Mt. Pleasant Neighborhood Family Service Center. With audio.

Probably the highlights of the officials’ statements were the U.S. Treasurer acknowledging that something like half of the 2.2 million homeowners who face adjustable rate mortgage interest resets during the next two years won’t have the financial ability to meet their new payment obligations, and County Treasurer Rokakis citing a Congressional Budget Office study that concluded that every foreclosure costs the affected community $224,000, while loan workouts on average cost only $3,300. Although Ohio Treasurer Cordray included “funding” in his description of the role that the federal government needs to play in response to the crisis, the U.S. Treasurer carefully avoided mentioning any kind of financial assistance in her remarks, focusing instead on amending lending laws, encouraging lenders to restructure loans, and educating consumers about credit products.

Two down, thousands to go (or, Eloise Anderson’s amazing summer)

PD this morning:

A Solon builder who has been tied to mortgage fraud has agreed to get out of the construction business as part of his punishment.

Edward Emery Jr. pleaded guilty Thursday to submitting a false loan application for a woman who bought a $490,000 home on Sedge Circle in Solon that he built. Emery also admitted to similar schemes involving 37 homes that he built in Solon and Glenwillow.

Eloise Anderson of Richmond Heights pleaded guilty to using bogus job and income information to buy the Solon house, two houses in Cleveland and another house in Pepper Pike — closing more than $1.3 million in deals over a five-month span in 2005.

Emery was not connected to Anderson’s other homes, Assistant Prosecutor Michael Jackson said. A title company owner, a mortgage broker and two officials from another mortgage company also face charges in the case.

Anderson, a 60-year-old postal clerk, was passed off as a postal inspector earning twice her $55,000 salary.

She planned to quickly dispose of the homes under rent-to-own deals, Jackson said. Solon police broke the case when neighbors on Sedge Circle complained that the tenants were not keeping up the property.

Here’s the indictment, courtesy of the excellent Mortgage Fraud Blog.

So who lent Eloise Anderson all that money?

• For the house on Sedge Circle in Solon, she got $490,000 from Argent Mortgage. Then seven weeks later she got a $392,000 mortgage from First National Bank of Arizona, which somehow allowed her to pay off Argent. (This mortgage was sold a year later to Deutsche Bank — apparently serving as trustee for an entity involving JP Morgan Chase, because these two companies were co-plaintiffs in the foreclosure action against Anderson that resulted in the sheriff’s sale of the Sedge Circle house a couple of weeks ago.)
• To buy the two houses in Cleveland, at 3606 West 45th and 4081 East 64th, she got a total of $177,210 from Long Beach Mortgage, a major subprime subsidiary of Washington Mutual of Seattle.
• Finally, Anderson got $650,000 from Meritage Mortgage of Jacksonville to buy 2485 Lander Road in Pepper Pike, apparently with zero down payment. Meritage is a now-defunct subprime subsidiary of the now-also-defunct NetBank. (This mortgage was also acquired by Deutsche Bank, as trustee for an unidentified entity, in January 2007. It’s about to go to sheriff’s sale, too.)

The First National of Arizona and Meritage loans were actually provided by Mortgage Electronic Registration Systems, Inc., which would have gotten the applications from the local mortgage broker(s) working with Anderson, signed up the two lenders, and then peddled the paper to Deutsche Bank.

Anderson got all of these mortgages approved between the beginning of May and the end of September, 2005!

None of the lenders listed above are implicated in Anderson and Co.’s fraud — in fact, they’re mostly listed in the indictment as victims. But think about it: She faked her income, faked her credit, applied to borrow a million and a half dollars in five separate steps over a five-month period, from four different subprime lenders, and they all bought it.

Maybe they were all just too busy to notice.

Or maybe they liked what they saw.

“Foreclosure Crisis – Shaping the Consumer Response”

An email last evening from Larry Bresler of Organize! Ohio:

Organize! Ohio and Bromley & Associates are sponsoring a one day fair lending conference: “Foreclosure Crisis-Shaping the Consumer Response”. It will be held on Friday, November 9, 2007 from 8:30 am to 3:30 pm at Trinity Cathedral, 2230 Euclid Avenue, Cleveland. Free parking is available off the East 22nd Street and Prospect Avenue entrance to the church.

The conference will feature national and regional experts presenting strategies to combat predatory lending and payday lending. Among the speakers will include Ohio Attorney General Marc Dann, Ohio Representative William Batchelder (R), Stephen Dane, nationally recognized attorney in fair housing and mortgage lending, and Marty Gelfand, counsel from Congressman Kucinich’s office who organized a series of public hearings related to sub prime lending and foreclosures. An overview of Governor Strickland’s Foreclosure Task Force will be also presented.

More information at the Organize! Ohio site.

Foreclosures recorded in the last week

177 sheriff’s deeds were filed with the Cuyahoga County Recorder’s Office in the past week (October 22 through October 26).

Here’s who filed five or more of them:

Deutsche Bank (30)
Wells Fargo (15)
US Bank (14)
Dept of HUD (12)
Bank of New York (11)
Household Realty (11)
Lasalle Bank (10)
City of East Cleveland (6)
National City (6)
Washington Mutual (5)
JP Morgan Chase (5)

(Previous week.)

(c/p CCD)

Map: Deutsche Bank properties in Cleveland

The most active forecloser and biggest title-holder of foreclosed properties in Cleveland is Deutsche Bank, a German corporation which has no office I can find in Cleveland or even in Ohio, and which does virtually no lending here.

At the beginning of this week (October 22), according to the County Auditor, Deutsche Bank held title to 570 properties in the city — up from 532 one month earlier.

Click on the graphic for a Google map of all these properties (not including a few vacant lots without addresses).

(Map created with GPS Visualizer.)

The week that was

Treasurers talk foreclosure crisis

New law focuses on foreclosures in Maple Heights.

U.S. treasurer tours Cleveland areas wracked by foreclosure

National City doubles job cuts, reports 80 percent drop in profits

National City’s Subprime Misery (Forbes)

Cleveland, Cuyahoga officials consider county agency to buy vacant houses

The Arms Race: While The Feds Dawdle, State And Local Officials Look For Shelter From The Gathering Mortgage Storm

Study says foreclosure hurts town, neighbors

Foreclosures lead to rise in abandoned pets in Cleveland

Staring into Countrywide’s abyss

Lenders Curb New Mortgages In Weaker Areas

ACORN analyzes foreclosure crisis impact on Cleveland metro area

Foreclosure Exposure 2, an ACORN research report released yesterday. Here’s a Beacon Journal story about the Akron version.

Countrywide agrees to ARMs refinancing

The country’s biggest subprime lender has announced an offer to refinance over 80,000 adjustable-rate mortgages, according to a story in USA Today.

Countrywide Financial plans to announce today that it will restructure or refinance $16 billion in adjustable-rate mortgages that have recently reset to higher rates or will reset by the end of next year, stretching some homeowners to the breaking point.

Its plan comes as the mortgage industry tries to head off mounting political and public pressure and an alarming foreclosure rate.

Countrywide, the nation’s largest mortgage lender, says its program will help about 82,000 borrowers, mainly those with “subprime” credit…

The plan would benefit Countrywide borrowers who:•Are in default on their loans because of an interest-rate reset in the past few months. Countrywide will send a letter offering to roll back their rate to the previous, lower level. Countrywide expects to modify 10,000 of these loans, totaling $2.2 billion, by the end of this year.

•Are likely to have difficulty affording an upcoming rate increase and are unable to refinance. Countrywide will modify the loan to a rate that will keep borrowers in their homes. The lender says it expects to modify 20,000 loans totaling $4 billion through the end of next year.

Those borrowers who fall behind because they’ve lost their jobs and lack enough income to keep up with a mortgage won’t qualify.

•Had subprime credit but have been making payments on time. Countrywide will offer to refinance them into a lower-interest “prime” loan, or a mortgage insured by the Federal Housing Administration, Fannie Mae or Freddie Mac. The lender estimates that about 52,000 borrowers would qualify for a new loan, and it expects to refinance $10 billion in mortgages.

These borrowers, however, will have to pay the fees to refinance their loans.

This looks like at least a partial victory for Cleveland’s ESOP and other community organizations who targeted Countrywide in a campaign for ARMS refinancing launched last month in Cleveland.

(Thanks, Jeff.)

P.S. More national news, via Financial Week via an email from Jim Rokakis: Frank floats bill to set stricter standards for subprime mortgages; financial firms’ liability could increase.

Financial institutions that packaged “bad” subprime mortgage loans into complex structured investments and then sold them could be held liable for some of the losses in the credit market, according to legislation sponsored by Rep. Barney Frank (D-Mass.).

The bill, which is co-sponsored by Democratic Reps. Brad Miller and Mel Watt, both from North Carolina, sets stricter standards for what constitutes a “good” loan, requiring a greater chance of repayment and larger “tangible benefits.” For loans that did not meet such standards, borrowers would be able to recover twice the costs of the loan. Conventional loans would not be affected by the bill, Mr. Frank said today at the annual Association for Financial Professionals conference in Boston.

Frank chairs the House Financial Services Committee. Here’s more from today’s Boston Globe.  And the PD.