The Housecleaner and Cabby with the $700K House
Naira Costa is a house cleaner from Brazil who is a prime example of why the mortgage melt down happened. In yesterday's WSJ, her story was told and it is a doozy. Through a pastor turned mortgage broker, with her taxi driver husband the pair bought a house in the Bay area for $688,000, even though they had very bad credit scores and couldn't possibly afford the payments.
The story by Jonathan Karp and Miriam Jordan follows their convoluted path. First off, they were told the house would appreciate $100,000 per year. Her real estate agent then put Costa's name on her own credit card to boost her rating, and lent her $2000 at closing. The application listed her housecleaning income at $12500 per month (she made six times less) and her bank account as having $50K when it contained just $42.
So the pair bought the house, and the first mortgage bill arrived. The bill is $3,600 and another is for $1400. "Barely three weeks after moving into the house, the couple decided to abandon it and left without making any payments. Eventually, the house slipped into foreclosure." So the case went to court, and just as the pair was about to be deported back to Brazil, they got a break. By agreeing to testify in the criminal investigation, they can stay, and presumably, happily rent a place they can afford.
The offices that once held 30-40 property and mortgage agents is quiet and empty now. "The only growth in the sector, said a broker, is lawsuits." She's now shifting out of real estate and into a multilevel marketing scheme to create online travel agencies.
The story by Jonathan Karp and Miriam Jordan follows their convoluted path. First off, they were told the house would appreciate $100,000 per year. Her real estate agent then put Costa's name on her own credit card to boost her rating, and lent her $2000 at closing. The application listed her housecleaning income at $12500 per month (she made six times less) and her bank account as having $50K when it contained just $42.
So the pair bought the house, and the first mortgage bill arrived. The bill is $3,600 and another is for $1400. "Barely three weeks after moving into the house, the couple decided to abandon it and left without making any payments. Eventually, the house slipped into foreclosure." So the case went to court, and just as the pair was about to be deported back to Brazil, they got a break. By agreeing to testify in the criminal investigation, they can stay, and presumably, happily rent a place they can afford.
The offices that once held 30-40 property and mortgage agents is quiet and empty now. "The only growth in the sector, said a broker, is lawsuits." She's now shifting out of real estate and into a multilevel marketing scheme to create online travel agencies.
posted by Max Hartshorne at 8:25 AM
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