Sign up for our newsletters   

Baltimore City Paper home.
Print Email

Crash Course

Under the Abacus Deals

By Edward Ericson Jr. | Posted 4/22/2010

Wall Street Journal reporters examine the mortgages beneath the Abacus deals.

Nice mix here of foreclosure stories, from a guy who got hit by a truck and a Romanian immigrant who got scammed by a predatory lender, to a woman in California's Inland Empire who worked as a nursing-home assistant and also somehow allegedly ran a daycare operation grossing $9,000 per month. "[S]he says she was having a hard time making the $5,000 monthly payments on her existing $688,000 mortgage, which carried an initial interest rate of 9.05%," the newspaper reports:

Nonetheless, she took out an even bigger loan from Fremont, which lent her $786,250 at an initial interest rate of 7.55%óbut that would begin to float as high as 13.55% two years later. She says the monthly payment on the new loan came to a bit more than $5,000.
She defaulted in early 2008 and was evicted from the house in early 2009.

Perhaps the WSJ reporters should have confirmed her $9,000-per-month income claim, but then again, we don't expect them to investigate the Easter Bunny every year.

The Denver deal is the real doozy.

Again, I say, the fraud at the bottom is a huge contributing factor to the crisis. We need to shut down this nation's land-scam industry before it kills again.

Related stories

Crash Course archives

More Stories

Goldman Fraud Is Not Goldman's Alone (4/19/2010)
Goldman fraud, Paulson's billions, and the rise of the Asshole Class

Mortgage Modifications Redefaulting at Increasing Rate (4/15/2010)
Mortgage modifications redefaulting at increasing rate

Mistaking the Transmission for an Engine (3/29/2010)
Mistaking the economic transmission for an engine

More from Edward Ericson Jr.

Old Habits (7/28/2010)
Medicalization is the hot new thing in drug treatment. Just like in 1970.

Room for Improvement (7/14/2010)
Celebrated crime control measure actually a flop, former chief reveals

Shelling Out (7/7/2010)
Mortgage broker goes bankrupt, seeks mortgage modification as taxpayers face mounting bailout bills

Comments powered by Disqus
Calendar
CP on Facebook
CP on Twitter