How to Lose Your Home (and Keep Your Mortgage)
Like so many others in recent past, Adrienne Dawkins, a mother of three from Reading, Pa., lost her home late last year. But unlike the victims of the subprime lending crisis, Dawkins' home was not reclaimed by a bank over a delinquent mortgage. Instead, she and ten other homeowners at Deer Path Woods condominium complex were forced by their condo association to sell their homes – in most cases, for 30% to 40% of their independently appraised value.
The events leading up to these forced sales began last fall, when the company that owned and rented out the remaining 97 units at Deer Path was itself on the brink of foreclosure. "When the owner of the rental units failed to pay his mortgage," explains Wiggin, "a company under the control of local developer Kevin Timochenko snapped all of them up for $7,200 at a foreclosure auction."
As the new majority stakeholder at Deer Path, Timochenko's company more than doubled condo association fees. Shortly thereafter, it dissolved the condo association altogether, which gave it the authority to sell the entire condominium – including the owner-occupied units – under state law. The appraiser hired by Timochenko valued the units between $31,000 and $34,219 – a far cry from the $90,000 and $101,000 that independent appraisers proposed to former homeowners Teresa Fusco and George Schwambach. Once Deer Path went up for sale, it was snatched up at an auction for $3.425 million.
"The buyer? Another company controlled by Kevin Timochenko."
Wiggin adds: "Still reeling from the loss of their units, the former owners have so far been told that they have little, if any, legal recourse. Everything that the companies controlled by Timochenko have done is perfectly legal."