Aurora – A neighborhood does not recover from mortgage fraud and mass foreclosures overnight.
Yet, sale contract by sale contract, homeowners in the Villas at Cherry Creek are cheering the restoration of a community that many once saw as an ideal place to retire.
Gone are the squatters who pulled down paper shades and slept on air mattresses in stylish new villas. The process server with the old VW van can no longer be seen hiding in the bushes in pursuit of his quarry. A tasteful real-estate kiosk has supplanted the embarrassing row of for-sale and for-rent signs that stood at the entrance. Realtors are showing and selling foreclosed homes.
Homeowners say their daily unease about living among convicted felons has been succeeded by a renewed sense of neighborhood pride. Some have grown comfortable enough to leave a house door unlocked in their gated community.
Two years ago, a group of ex-convicts turned the Villas at Cherry Creek into their personal cash drawer, buying homes for inflated prices, obtaining 100 percent loans from distant lenders and splitting the excess proceeds.
But next month, on the day five mortgage-fraud participants face federal criminal sentences, neighborhood residents are planning a victory party.
“It’s time to celebrate,” said Carolyn Brinkmeyer, a homeowner who urged authorities to investigate. “We deserve it.”
She and her neighbors have waited a long time to get their neighborhood back.
They began suspecting trouble in late 2004, when villas that looked like their $400,000 homes suddenly started selling for $600,000 or more.
Strangely, most of the buyers never moved into a neighborhood of attached villas designed for retirees and emptynesters.
Some left their brand-new homes vacant. Others rented them to people who stayed a month or two or handed the keys to young squatters who came and went, sleeping in unfurnished homes.
For many neighbors, the low point was a New Year’s Eve party just over 14 months ago. That night, they learned that 150 young revelers had been given the access code to their gated community. Peeking out of their windows, they saw cars lining their street. All night long, people traipsed back and forth with drinks to three of the villas sold to mystery buyers, including one where the owner planned a basement sound studio.
Then the neighbors learned some of these buyers had criminal records and had spent time in federal prisons for selling crack cocaine.
Ken Simpson, a retired anesthesiologist, warily watched a neighboring home where the curtains were always drawn and the occupants never ventured outside except to leave in a car.
“Where better to warehouse drugs,” he wondered, “than in a gated community?”
The fraud ring that struck the villas, according to federal court records, took more than $2 million from various lenders.
Torrence James and Ronald Fontenot, two men who met as federal prison inmates in Colorado, became mortgage brokers after they were released. They recruited straw buyers, secured 100 percent financing on villas sold at grossly inflated prices and siphoned excess money at loan closings to companies they controlled.
Taiwan Lee acquired three villas while wanted for violating parole and two more after he was back in prison.
In a continuing investigation, eight people have been indicted and pleaded guilty to federal crimes. At the Villas of Cherry Creek, 18 homes have been foreclosed. The homeowners association is owed more than $40,000 that could have been used to landscape the neighborhood and maintain its streets, sidewalks, clubhouse and pool. Now residents worry that their property taxes could get skewed by a scheme that pushed villa prices as high as $675,000.
But they also say their neighborhood is becoming a great place to live again. On sunny days, 10-minute strolls turn into half-hour walks because neighbors stop them to chat. Deer, foxesand cottontail rabbits wander in from Cherry Creek State Park, which adjoins the villas.
“I don’t have this sense of unease: What’s next?'” said Ray Colavita, who heads the homeowners association. “It’s a great community. Great amenities, well-built homes; the actual residents are a fine group. Like the Marines, all we need is a few good men here. We’ve come a long way.”
In a 100-villa neighborhood, 20 remain vacant. But three of the foreclosed homes were sold recently at bargain prices, and several real-estate agents are planning a neighborhood open house Saturday.
“We love this place,” said Nancy Simpson, Ken’s wife. “We’re here for the long haul.”
The breakup of the fraud ring “has given me a little more sense of peace, and a little more sense of entitlement to a community,” he agreed.
“I’m a little more accepting of the people that drive by,” Ken Simpson said. “I don’t think they’re felons.”
Staff writer David Olinger can be reached at 303-954-1498 or dolinger@denverpost.com.
