Greeley – A state civil-rights agency and the Weld County district attorney’s office are investigating sales of new houses to Spanish-speaking buyers who are losing them in foreclosures.
The homeowners have complained that their houses are worth much less than they paid for them and that their mortgage payments are higher than they expected.
Some also say they discovered after obtaining home loans that their loan applications grossly overstated their income and listed bank-account savings that don’t exist. Many of the residents say they read little or no English and did not understand the loan documents they signed.
They contend the builder, Mark Strodtman, referred them to a mortgage broker who qualified them for high-interest loans that cannot be refinanced because they exceed the values of their homes.
“I don’t care about the money. I just want justice,” said Adriana Fausto, who says her mother’s income as a commercial laundry worker was trip led on a document she received at her loan closing to qualify her for a $210,000 house.
Strodtman told The Denver Post in December he did not mislead any customers about their potential mortgage payments and didn’t provide financing for the properties. In the past week, Strodtman did not respond to numerous messages left with his business office and business associates.
Fausto said she has been speaking with an investigator from the Colorado Civil Rights Division and providing information about other homes Strodtman sold in Gateway Lakes and Gateway Estates, two new Greeley subdivisions.
“I’m aware of a group of individuals concerned about their home loans” in Greeley, said Civil Rights Division Director Wendell Pryor. Pryor said he could not confirm or comment about any ongoing investigation.
Generally, he said, “The division has been concerned about predatory lending practices throughout the state.”
Residents questioned
Separately, an investigator for the Weld County district attorney’s office met with residents this week, inquiring about Gateway home sales. District Attorney Ken Buck said he could not comment on the investigation.
In a series, “Foreclosing on the American Dream,” The Post reported in December that new Gateway Lakes homes purchased in 2005 were being foreclosed a year later.
David Kiekhaefer, a local builder and real-estate broker, analyzed neighborhood sales and concluded that Strodtman was selling houses for $40,000 to $50,000 above market value.
Strodtman responded at the time by explaining that his houses sold for relatively high prices because they are larger and more luxurious than others in the neighborhood.
At a neighborhood meeting last week, about 25 men and women crammed into the basement of one new house to share stories about their home loans. Most spoke little or no English.
All said they bought their homes from Strodtman. Among those who had loan documents, all had been referred to the same mortgage brokers, Charles Brandt and Jessica Feliciano of J.C. Distinguished Finance LLC. Several home owners also brought their appraisals. All of those were done by Clinton Scott, a state-licensed appraiser in Aurora.
Scott estimates he evaluated about 10 houses in Gateway Lakes and an adjoining neighborhood. He said other appraisers looked at Strodtman’s houses and similarly concluded they were worth the price.
“I think the values have gone down in the last two or three years,” he said. “I live in Aurora. The prices are dropping here too.”
A mortgage broker who arranged financing for Strodtman’s homes had other real-estate dealings with Strodtman, according to Weld County records.
In one month last fall, Brandt purchased seven houses for $1.7 million, borrowing 100 percent of the sales prices and promising to occupy them all as his primary residence,according to deeds filed by the lenders in Weld County. Four of the seven were bought from Strodtman or his business, county records show.
Brandt and Feliciano did not return numerous calls to their business and their cellphones.
Incomes inflated
At last week’s neighborhood meeting, seven homeowners said the income listed on their loan applications exceeded their real income and that they did not know that when they signed the loans.
Adriana Fausto said her mother earns about $300 a week, not the $3,900 a month listed on a document given to her at the closing.
Modesto Martinez Santos, a locksmith, said he earns about $34,000 a year. His loan application said he makes $78,000. It also reported that Santos had thousands of dollars in a bank account, an asset he said does not exist. Santos, who speaks Spanish, said he signed the English-language document and learned only later what it said about his income and bank account.
Some homeowners had signed loans with interest rates exceeding 10 percent or two-year adjustable rates that will raise their mortgage payments this year. One requires a final $140,918 “balloon” payment after 30 years of mortgage payments.
Stella Rojas, a nurse’s assistant whose husband is disabled, said Strodtman agreed to build a handicapped-accessible house for them, but “he wanted something to promise we would close.”
It was the title to her 2000 Cadillac Escalade.
At the closing, she said, she learned their payments on a $280,000 house would come to $2,061 a month, more than half their income. She said that was about $400 a month more than Strodtman and his assistant had estimated. She signed the loan anyway because she believed Strodtman would have taken her car otherwise, she said.
Some people who bought new houses from Strodtman in the past two years say they cannot refinance them because they borrowed more than the houses are worth. They also complain of construction flaws and broken promises.
“They are not good houses. There’s no air conditioning, but I paid for it. The garage-door opener wasn’t installed,” said Blanca Rivera, a 35-year-old home owner. “The windows don’t close well, and cold air comes in.”
She paid $200,000 for her house in December 2005, but county records indicate it’s worth $147,000, she said.
At The Post’s request, a Greeley appraiser who reviews the work of other appraisers for mortgage giant Fannie Mae examined Clinton Scott’s evaluation of a house Strodtman sold for $200,000.
The appraiser, Greg Platt, said it appeared that Scott “cherry- picked” the highest prices available and used two houses not advertised in real-estate listings as comparable sales. In the same area, “there were numerous sales in the $175,000 range,” he said.
Scott disputed that criticism. Strodtman’s homes “were selling for that amount before I appraised them,” he said.
Staff writer David Olinger can be reached at 303-954-1498 or dolinger@denverpost.com.
