High and Low Finance – Trail of Bad Loans Leads to the Couple Next Door
In the spreading mortgage crisis, there are many homeowners who were tricked into taking out loans they could not afford, or who failed to understand the risks they were taking.
This column is not about them.
Instead it highlights a trail of foreclosures left by a Florida couple, Scott and Deanne Hopp. They bought and sold house after house, and seem to have done well at it for a time. They specialized in buying houses with less than no money down, borrowing more cash than they actually had to pay.
One of their homes caused a scandal when it was featured in the local newspaper as being used for sex parties promoted on the Internet. (The report said that some partygoers had to pay a fee, but that others had been admitted free in return for agreeing to allow the party organizers to use videotapes of their party activities.)
The Hopps protested that was not their fault, that a tenant had organized the parties without their knowledge. Simply renting out the house was a violation of the terms of their mortgage, but the lender, Countrywide Financial, evidently did not notice. A month after the scandal broke, it gave the couple another million-dollar loan to buy a house four miles away.