Mortgage applications surge 25% in the new year as interest rates drop
Between Nov. 30, 2006 and Jan. 19, 2007, Lloyd Varma took out 20 mortgages worth a combined $6.4 million to purchase 10 homes in southern Queens with no money down, though he had no considerable wealth. Varna has since defaulted on those loans. Eight of his properties, predominantly in minority and low-income areas in Queens, were in foreclosure by the end of 2007. How a man with no prior wealth or assets to speak of got so many mortgages in such a short amount of time has a lot to do with the forces that fueled the housing boom and bust in general, experts say. Varna’s loans came mainly from subprime lenders, and according to Jonathan Pinard, head of the Empire State Mortgage Bankers Association, “all probably weren’t aware of the other.” Because deeds and mortgages are not recorded immediately, Varna would have been able to get loans from many different lenders without disclosing that he owned money to the others. The impact has been felt most intensely by his tenants and their neighbors. At 107-22 113th Street and 107-28 113th Street, both of which are in foreclosure, Varna served eviction papers to his tenants for not paying rent, and he has turned off utilities in several other buildings. Property values near Varna’s properties, in areas already hit hard by the foreclosure crisis, like Jamaica and Ozone Park, have dropped by as much as $30,000. [NYDN]
