Category: Local Businesses, Mon Valley Miscellany || By

The new mortgage fraud task force created by U.S. Attorney Mary Beth Buchanan is actually one of the best things to happen for consumers in a long time.

So says Mike Mauer, housing and financial counselor at the nonprofit Mon Valley Initiative, based in Homestead. He says snarky comments recently aimed at Buchanan by the Almanac were off-target.

"It used to be traditional in banking that if you wanted a home mortgage, you would go to a local mortgage banker," Mauer says. "He lived in the community and he would educate you about what you could afford, and then put you into a 30-year, fixed-rate mortgage.

"Now, mortgage brokers take no responsibility," he says.

. . .

Deregulation of the mortgage industry, combined with low interest rates, fueled a land-office business among mortgage brokers. Some of them were honest. Some of them weren't.

"Do you know what it takes to become a mortgage broker?" Mauer asks. "Seven-hundred dollars to the Pennsylvania Department of Banking, an office, and a phone number."

Much of his job is "pre-purchase" counseling. If someone wants to buy a house in the Mon Valley and hasn't owned a home before, or isn't sure how to qualify for a loan, Mauer can assess them for risk and recommend strategies.

"I pull out your credit report and go over it line by line," he says. "If you stink, I can work with you until you un-stink."

. . .

Lately, however, an increasing number of Mauer's clients are coming in after getting a mortgage through a broker that advertised on TV or radio. Some of those brokers have since disappeared.

Some of Mauer's clients were sold mortgages far beyond their means.

Their brokers --- eager for higher commissions --- falsified or fudged income statements or lied about their applicants' credit.

They pushed prospective homeowners to take out mortgages they couldn't afford, or signed them to adjustable-rate mortgages without clearly explaining what would happen to their low initial payments once interest rates went up.

. . .

Then the brokers sold the mortgages to lenders, took their profits and went out of business, Mauer says: "They make their money, sell their loans, and they're done, and since their corporations are shells, you can't go after them personally."

"I take calls now from people who say, well, I'm getting delinquent on (my) home loan," he says. "I do a reverse assessment." If there's evidence that the mortgage broker falsified an application or misled a homeowner, Mauer calls the U.S. attorney's office.

Buchanan's task force is a consumer protection move, Mauer says, and will make it much easier to report fraudulent lenders.

. . .

There's a silver lining for the Mon Valley, he says. Real-estate prices are so depressed here that mortgage fraud and the resultant foreclosures are hardly as widespread as they are in the Sunbelt states.

And there's no shortage of good, 1950s through '70s vintage homes available for $60,000 or less.

"In housing, we're just like in our own little world," he says, laughing. "Here, if you make 32 grand, you can live like a potentate."

. . .

MVI serves Braddock, Charleroi, Clairton, Duquesne, East Pittsburgh, Homestead, Monessen, North Braddock, Rankin, Swissvale, Turtle Creek, West Newton and several neighboring communities.

But not McKeesport, 'cause if you know McKeesport, it always goes west if everyone else is going east. The city's development corporation is not a participating MVI agency.

For information about programs for new homebuyers in Our Fair City, contact the McKeesport Development Corp. or the Allegheny County Department of Economic Development.

. . .

Mon Valley Initiative and PNC Bank will host a workshop for first-time homebuyers from 9 a.m. to 4 p.m. Saturday, April 12, at the Marriott Courtyard in The Waterfront, Homestead.

Counselors will advise residents how to know if they qualify for a loan, how to determine what home price they can afford, and what to do if they have poor credit. Bankers will explain closing costs, points, fees, and interest rates.

A free lunch buffet will be served, but seating is limited. Call (412) 464-4000, ext. 4008.

MVI homebuyer flyer (PDF document)