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Newspaper reporter needs your help, new fraud series.

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Please contact this reporter if you have stories to share.

Barbra Arntsen

[email protected]







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May 05, 2002
It isn't just the paperwork, but the payments and appraisals


By BARBARA ARNTSEN, Daily Dispatch Writer


Brenda Williams is in over her head.

Saddled with high house payments totaling approximately half of her take-home pay, Williams is filing bankruptcy and in danger of losing her manufactured home. Williams said Donald Gupton of Creative Real Estate led her to believe she would be able to refinance to a better rate within a couple of years if she made her payments regularly. But a refinancing has proved impossible.

Williams' loan, like those of her neighbors in the Key Estates subdivision, began with an interest rate between 11 percent and 13 percent, which is fixed for two years. According to the loan documents, after that period the payments will go up by about 7 percent. Six months later the payments will increase by another 7 percent.

Williams hoped to refinance before the two years ended, but she fell behind in her payments when she lost her job. She has since found employment, but was still forced into bankruptcy.

Because she had been told her home was already worth more than the purchase price, Williams thought she had equity to help refinance the mortgage and rid herself of the high monthly payments.

She found out that wasn't an option after taking her papers to a local expert for advice.The expert told her that her home had been appraised well above its true value and couldn't be refinanced.

Williams said she had asked Gupton and sales manager Gene Thompson about that high appraisal about a week after she closed on the home. "I was looking at the HUD sheet, and I asked them, 'I see this property was appraised at $119,000. Why are you taking the loss on this? Why are you selling me a piece of property that has been appraised at $119,000, and you're selling it to me at $98,000?' "

She said they told her it was automatic equity in her property.

"It wasn't until recently, when I started asking questions and going through my paperwork and stuff, and having other people look at it, that I realized that's no equity," she said. "When it's time for you to refinance, you're not going to be able to refinance these places. You're just going to be stuck down here with those high payments, or you're going to lose your home."

Gupton said that in cases where the appraisal rate is higher than the loan, the homeowner will sometimes take a second mortgage for the difference.

"In a case where they might not get enough loan to get the home put through, this helps them get the home, getting a second mortgage," he said.

Williams has filed for bankruptcy and is hoping she will be able to hold on to her home.

Her neighbors are still able to make their payments but worry about what will happen when their two-year period is over. They fear they will not be able to afford the higher rate and will not be able to refinance.

"People are moving out of here all the time," Saunders said.

Gupton said he wishes people would contact him if they are having problems.

"If they came to see me, that would give me an opportunity to see if people are doing something wrong," he said. "I believe it is just a situation of total misunderstanding."

Williams, who said she has contacted the company on several occasions, is hoping to raise awareness of this problem and get help, not only for herself, but for others who are going through the same situation.

"My thing is, you're going from one person to the next person to the next, trying to get some help," she said. "And here in Vance County, everybody knows there's a problem, but nobody's willing to say, 'OK, this is what we can do to help you.' "


Where to call for help


If you have experienced problems with high mortgage payments due to high interest loans or other related issues, here are some phone numbers to call:


Coalition for Responsible Lending, (919) 956-4485

North Carolina Fair Housing Center, (919) 667-0888

Community Reinvestment Association of North Carolina, (919) 667-1557


The writer can be reached at mailto:[email protected]
 
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