Tuesday, July 31, 2007

Savers Are from Mars. Debtors Are from Venus. Episode 4

Is Renting So Bad that You Would Steal?

You find a wallet. What do you do?

If you are Elizabeth Cabrera-Rivera, you steal Jose Lara's identity to commit loan fraud by getting a no-documentation mortgage ("no-doc mortgage") for a $419,000 townhouse in his name. Mr. Lara only discovered the plot when he received a $2,800 refund for closing costs and the jig was up for Cabrera-Rivera.

It gets even stranger.

Elizabeth Cabrera-Rivera committed the crime because she could not get a mortgage in her own name. However, she did not abscond with the cash. Nor did she try to get free housing by defaulting on the mortgage and stretching out the eviction. No, our heroine dutifully paid the monthly mortgage payments on time.

Yes, she was buying a townhouse for Jose Lara. Sadly, it sounds like she could have been very successful building equity/savings in her own name while renting. Instead, decades of her toil gets her to that magic moment when the mortgage is paid off . . . for someone else.*

How is that better than renting?

How brainwashed must you be that you "have to" have a mortgage, even if it is to build someone else's home equity?*

* Update 11/12/07: Cabrera-Rivera later transferred the deed to her name (see comments).


Anonymous said...

You have the facts wrong, actually. The mortgage was under Mr Lara's name, but the house was deeded to HER name, not his.

J at IHB and HFF said...

Hello. The linked Business Week article states, "to purchase a townhouse in his name."

Perhaps Business Week is wrong or written badly.

Thank you for the tip.

J at IHB and HFF said...

Washington Post states that she did buy it in his name but later transferred the deed to her name:

"[S]he had "Lara" deed the house over to her for free, "for natural love and affection and as a gift," according to the gift deed filed in Fairfax County about five weeks after the September 2006 purchase."


It is somewhat comforting that she did not overlook that major point, although it still seems that she could have been a financially successful renter if not bitten by the "dream of home ownership" bug.