Friday Links
Flushing Avenue. Photo by dannythefox. United Homes Suckers Bed Stuy Mom [NY Daily News] Fire Guts House at 663 Rugby Road [WNBC] Richard Rogers Wins Pritzker [Gothamist] Karl Fischer Row is Coming Along…Slowly [Curbed] How To Stain Wood [Charles & Hudson] How to Free Pocket Shutters [Forum]
Flushing Avenue. Photo by dannythefox.
United Homes Suckers Bed Stuy Mom [NY Daily News]
Fire Guts House at 663 Rugby Road [WNBC]
Richard Rogers Wins Pritzker [Gothamist]
Karl Fischer Row is Coming Along…Slowly [Curbed]
How To Stain Wood [Charles & Hudson]
How to Free Pocket Shutters [Forum]
Is the plaintiff’s lawyer thinking about filing a class action suit? This would be a great idea. I’m sure many other victims will step forward.
Thanks 4:45.
The times article is interesting and harrowing. I have been a big proponent on these boards about NOT going through a mortgage broker, getting EVERYTHING in writing and getting a couple balls rolling for mortgage options. Too many conflicts of interest with brokers and a wasted application fee with a lender is a small price when you’re talking about hundreds of thousands (or millions) of dollars.
Early in my home hunt, I saw several Developer’s Group properties and similar alarm bells were going off (was it one of their properties I’m thinking of that had the C of O problems?).
I agree about homebuying courses being recommended. I can’t say I have attended any, but I definitely did a LOT of reading about mortgages beforehand and went on a VERY trusted recommendation for our lawyer.
I don’t want to come across as attacking the mom, but I do think that to a certain extent this exemplifies the overly litigious sentiment in this country. I don’t doubt that United Homes deserves the suit, but (without knowing more about the case) but suing Credit Suisse Boston sounds suspiciously like they’re just suing the people with the most money.
mr. cynical, got it. I mentioned the $1400/mth (not brktwo). You’re right, alarm bells were ringing and red flags were popping up all over the place when I went to look at the United Homes properties. I knew that I was being taken on so many levels. Some warning indices were tangible (higher than usual market price, unusually overly-friendly staff, aggressive marketing tactics, etc.). Other clues were based on gut instinct. I tend to be risk averse, so I ended up walking away from having any dealings with them. Incidentally, they marketed all over bed-stuy (billboards, advertising on the side of buildings, etc). And as brktwo suggested, I also thought for a quick second that they were a government agency (‘United’ Homes) or at least a nationwide, reputable one.
I still defend the bed-stuy mom because I think she was on the take from the start and she never had much of a chance to protect her interests. Part of it is knowledge about the home-buying process. But there’s also a sense of resignation that sets in at a certain point within the home-buying process. Lawyers tell you that you’re locked in the deal; you’ve already invested hard-earned, scarce cash that runs the risk of being forfeited if you walk away, etc.
I’ve had to fire lawyers on more than one occassion and it always feel as if you’re not only in a pickle but also back to square one. Some people probably aren’t even aware that they can and should get their own lawyer. So, having a second lawyer call you on the phone might not seem like an anomaly. Or it might just be resignation and hope that the new one will be better than the last one.
I agree with CHP that home-buying courses should be strongly recommended, if not required for first time buyers.
Also, check out this new article in the nytimes:
http://www.nytimes.com/2007/04/01/business/yourmoney/01nova.html?pagewanted=1
Hey brktwo-
I’ve said all along that United Homes is a bunch of sleazy bastards (actually, I think the word I used was “shady” to be specific). That is a given here and I’ve said previously that YES, take them to court, and furthermore (so my point of view is not misconstrued here) lock them under the jail, throw away the key and then burn down the jail on top of them. Then build a new jail on top of the old jail and repeat ad infinitum.
I’m sorry you almost got taken in by their scam, however, as a rule of thumb I don’t buy houses from a company that advertises on the subway.
It really isn’t that difficult to find a real estate lawyer – just ask around and do your research. If you’re buying a house, knock on the neighbor’s doors and ask about the house, the previous owners, the developer, etc (chances are the neighbors wouldn’t have much good to say about United Homes). and if they seem nice (hopefully since you’re planning on living next door to them) ask them if they know a good lawyer. Then call the lawyer and ask for references or just go to the library and use the free internet connction and do a google search on them. She didn’t seem to have much trouble finding lawyers to help her sue Credit Suisse Boston.
I agree that scam artists like them are a HUGE problem. They undermine our banking system in a big way and, as a resident of Bed Stuy (I live a block from Hancock in fact, so this specific example is particularly disturbing), I see first hand how they erode the neighborhood and it’s more than depressing. It’s infuriating.
However, as they say, it takes two to tango and nobody put a gun to that woman’s head to sign the contract. I’m not arguing in any way that United Homes isn’t a scam operation of filthy, slimy mother****ers but I’m also saying that there’s personal accountability (in varying degree) on both ends of the transaction. Sandra Barkley has obviously already suffered and hopefully she’s learned a LOT from the experience (and hopefully so will others who read this thread). But she was an active party in the transaction.
Your (generalized, non-specific, dramatized) description of what goes on with these scams is extremely vivid and hopefully will be helpful to future buyers. This sort of scam doesn’t only happen in Bed Stuy and it doesn’t only happen to the poor (watch out ORO buyers). Look at the poor suckers who bought “luxury” condos on Spencer St from a developer who sold them without a permanent C of O (so they can live there but can’t sell them, which is actually quite ironic since the people who bought into that building were primarily looking to flip them within a few years).
If you read the article, you will see that she “repeatedly asked” the United Homes salesman the price, and your hypothetical example of getting a buyer into a home “for only $1400 a month” is moot. Her payments were $2,536. Not $1400. If they told her she would be paying $1400 a month, then by all means add that to the list of charges, but you’re not talking about the (real, specific) example here. You’re talking about your harrowing, albeit dramatized example (I’m sure it does happen – I’m not suggesting you’re making this up… I just think it is more helpful to talk about the case at hand). The article doesn’t mention Bob or Jack or Laura. We’re talking about Sandra Barkley, single parent (not described as “elderly” or “headed for foreclosure” and without the deadbeat tenant, as in your dramatization).
Sure there’s a lot we DON’T know about this woman, but we do know she could have been smarter about things.
CHP – I also can relate to how confusing things are at closing, however the alarm bells should have been going off much, much sooner (like before she signed the contract). She did “fire” her first lawyer, but then she goes did nothing when she got an “unsolicited call from a second lawyer who informed her he would be representing her”. I still say that is gross ignorance.
Oh yeah… and she should definitely not take any more advice from her friend who recommended United Homes.
If they’re still friends, that is.
4:34 was me.
Back to say that when I bought my house, I was alone in a Long Island mortgage company conference room with a lawyer I met twenty minutes before, facing the seller, his attorney, a title company rep, the mortgage bank’s rep and the broker from the mortgage company. All of the rest of them had been in that position so many times, they were on autopilot. I felt like I was on trial.
I watched the bank rep go into his briefcase and take out a huge stack of papers in a file, a printer tape calculator, 3 pens and a package of roll-on correctable film. He lined up the pens and the correctotape dispenser, and made sure the paper worked on the calculator, and then looked up and said “We can proceed, I’m ready.”
I’m a reasonably intelligent, well read college graduate. I had been warned by family and friends to read every line in the mortgage, even if it took all day, and to be very, very careful. I was told to let the lawyer do most of the talking and to realize that no one in that room, no matter how nice, was my friend, as this was all about the making of money. I found it to be one of the most stressful events of my life.
I can certainly see how anyone can be cajoled, persuaded, or conned at a closing. The woman in the Post story should have known better, but I certainly understand how she got in the position she is in.
Just as you can’t get a driver’s license without taking that 3 hour safety course, first time homebuyers should be required to take a homebuying course before signing their lives away at closing. There is just too much that people don’t know. I’m not just talking about the lower income folks who are generally seen has stupid suckers, either. Most people don’t know jack about how this industry works, and most people of every race, creed and income level have been taken in on some level by their lack of knowlege, maybe not to the level of foreclosure or outright rip off, but in other smaller ways.
The fact that to buy real estate in this city REQUIRES the aid of an attorney should be a red flag right there. How many average Joes have a real estate attorney on call? How many requests show up in the Forum looking for a good one that people trust? Most of us end up relying on the word of a stranger that we have hired from either another stranger’s recommendation, or from the Yellow Pages. And this is for the largest purchase most of us will ever make?
How many of us know anything about construction, or renovation, or structural engineering? How many of us go on the roof or in the basement before buying a house? How many of us look at houses and can’t see beyond the seller’s taste in decoration and reject or approve of a home based solely on appearances?
How many people buying brand new homes think they need to get them inspected? They are brand new, they have to be good, right? How many celebs and rich folk are now complaining about the Meier buildings in the West Village? Those were super expensive, are those people suckers, like some sucker in Bed Stuy?
I think forums like Brownstoner are invaluable to help guide people in the right direction. I thought I knew a fair bit before starting to visit this site, but I know far more now from the people who write in and educate me, and from the topics that Mr.B chooses to feature. Education is the key. While our lawmakers need to get the predators out of business and in jail, we need to all support and patronize grass root and other programs that educate our citizenry on the largest purchase we will make – our homes.
Thanks brktwo and others for giving us an unbiased and educational lesson here.
Oh- And great! How perfect! They use their blood money.. the $60m they made last year ripping off poor people to sell luxury condos at ORO to rich stock brokers. What an amazingly effective redistribution of wealth from the poor to the rich.
Actually Mr. Cynical. Bob’s house was worth $500K and he only owed $100K. There is no reason for him to go to foreclosure as he could have very easily on the open market sold the house in a quick sale for $200K or $300K.
That’s what Bob was doing when he agreed to sell it to Mr swindle for $300K. But Mr swindle got (usually senior citizen Bob) tied up in a contract they do not have to honor. Bob is quite rational when he decides to sell for $300K.
They bought a $500K house from Bob by paying Bob $0 and getting it from the bank for $100K. So in the initial purchase they made $400K.
They fraudulently took about $200K on the same property via their “in house appraiser and mortgage brokerâ€.
That’s a total of $600K they have now made.
They sell that fraudulent loan destabilizing the banking industry (that’s a problem for the entire housing market which I read somewhere is collectively something in the vicinity of 30% of the National Economy… so actually Mr Cynical you are the fool who thinks this has no impact on you because you are so smart).
So they sell that loan for $100K… and now the grand total profit on Bob’s house is $700K.
They swindle Laura’s $70K.. so that’s $770K.
Then they sell the house to Jack and write the loan for it. They charge Jack all the closing fees on top of the $700K ask price so that’s $730K.. on that hoax.. which brings the grand total theft profit on Bob’s house up to $1.5.
Of that last hustle for $730K (with the “closing costsâ€â€¦ uuhhmm fee for the wonderful appraiser and a few points on the loan and 1% for the wonderful title company they used who didn’t find any violations on the property that Jack was buyingâ€â€¦ only $70K of that is Jacks loss.. the remainder is more back fraud. The stuff that impacts you Mr smarty pants.
They sell that loan for $200K.. bringing the grand total impact on the stability of the banking industry to $1.160,000. And their total profit at this point to $1.7.
Further, the $700K home is a rip off. It’s just a $500K house with $25K of sheet rock. But the recorded sale for $700K now artificially inflates the property values of the area which impact you again the general consumer if you should say want to buy a home in the neighborhood.
Further.. Jack is going to default on the loan and that property will now go back to auction.. but it is going to be auctioned now for $660K (the current loan). And now.. no one is going to buy it at auction and often the house will remain abandoned for a long time and burden for the residents of the neighborhood.
On a distressed Bed Stuy home… just 1 average home… they have made $1.7m and $1.160 of that is bank fraud. United Homes alone completes one for the million dollar transactions at least once a week so that’s $60,000,000/ year from one local company. That’s just one of them… there are tone in Brooklyn alone. And nationally the problem is worse.
How could there be so many “stupid†people? Well.. here’s how they do it.
When I first met with United Homes… I thought that they were a GOVERNMENT agency. ALL of their marketing suggests that they are a “do good†type of agency that promotes and protects home owners offering them these wonderful opportunities at home ownership.. that has the strong air of government backing or funding in someway.
The fine print doesn’t say it.. but you will walk out of their office thinking that they are government funded in some way.