A closer look at his lending practices, however, reveals that many of these loans relied on faulty appraisals and exaggerated loan applications, leaving behind angry homeowners who are struggling to pay mortgages on overpriced homes.
"I trusted him, I felt like he was an honest person," said Robin Fitzgerald, who negotiated with Wider to pay $805,000 for a home in North Massapequa in 2005 that a later appraisal valued at $545,000. Fitzgerald is now facing foreclosure. "I wasn't familiar with the prices of houses here. I'm a first-time homeowner."
Along with a handful of associates, Wider bought and sold houses and issued mortgages for at least 30 properties, pushing the prices of some homes to as much as $300,000 above similar sales in the area, a Newsday investigation has found. Most of the time, the houses were sold twice on the same day.
One of his bank's biggest borrowers was Wider himself, who received $10.8 million in home loans. Banks have begun foreclosure proceedings against the owners of at least 12 of these homes, exacerbating an already rising foreclosure rate in East Massapequa, the community where most of Wider's activity has been concentrated.
Wider's bank, HTFC Corp., is being sued in federal court by two large banks it sold millions of dollars in loans to -- Pennsylvania-based GMAC Bank and a subsidiary, Minnesota-based Residential Funding Company -- which charge in court records that the loans were fraudulent.
If the allegations are true, it suggests that Wider and his associates turned a profit on the real-estate deals by selling homes at inflated prices; issuing loans to cover those higher prices; and selling off the loans to other banks, thereby eliminating his responsibility for the loans if the borrowers stopped paying their mortgage. The two banks are seeking $19 million in damages.
In June, Nassau County Assessor Harvey Levinson's office forwarded details of several of Wider's sales to the Nassau district attorney's office, which declined to comment.
Wider's activities are coming to light in a time when foreclosures are mounting locally and nationally, focusing attention on lending practices that flourished during the housing boom. Throughout the last decade, as housing prices rose rapidly, mortgage companies loosened the rules that required buyers to document their income and make substantial down payments on houses. During this period, the companies earned money by selling mortgages to buyers such as GMAC, which assumed the risk that the homebuyer wouldn't be able to pay the hefty mortgage.
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source: newsday.com
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