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Tales of bankruptcy, foreclosure

By Susan Taylor Martin
Published March 25, 2007

Subprime mortgage companies have made many high-interest loans in the Tampa Bay area to borrowers with credit problems or prior bankruptcies (Chapter 7, in which most debts are discharged, or Chapter 13, which provides for partial repayment to creditors). These are some examples:

Where: St. Petersburg

Lender: Resmae, Fremont Investment & Loan

Despite a Chapter 7 bankruptcy in 2003, Reginald Cochran got four subprime mortgages, totaling $589,000, on two properties last year. One was from Fremont at an initial rate of 9.45 percent and three were from Resmae at rates varying from 7.83 to 8.91. Cochran, 35, who has worked as a car detailer, says he has "no problem" with the high rates and is making the payments.

Where: St. Petersburg

Lender: Mortgagepointer.com, Resmae

Carol Hurley, owner of a small salon, says slow business and her husband's ill health forced her to repeatedly refinance their house, most recently in April for $198,550 at 10.28 percent. Unable to afford the $2,100-a-month payments, which don't include taxes or insurance, the Hurleys have put their home up for sale. "It was traumatic for us because we've lived for 35 years in that house," says Carol Hurley, 69, who with her husband declared Chapter 7 bankruptcy in 2002 and has had other credit troubles. "There are so many wonderful memories."

Where: St. Pete Beach

Lender: Fremont Investment & Loan

Raymond Westlund Jr., who had a Chapter 7 bankruptcy in 1997, got two loans from Freemont in March 2005 - one for $135,000 and another for $540,000 at 6.45 percent to buy his waterfront house. Westlund, 76, says he ran into problems after his property taxes rose to $9,500 from $2,500 and his business, selling spas to Costco and other big-box stores, collapsed when his supplier discontinued him. The house was on the market for a year with no takers; it is now in foreclosure and set for public sale Wednesday. Westlund, who filed another Chapter 7 bankruptcy in November, hopes to hang on to his home but says there's "nothing concrete at this point."

Where: Tarpon Springs

Lenders: Southstar Funding, Resmae, New Century

Although she filed Chapter 7 bankruptcy in 2000, Kimberly Schwartz, 35, along with her husband, Jef, got a $255,000 loan from Southstar in 2003 at a rate of 9.88. They refinanced in 2005 with Resmae for $297,500 at 7.2. In January 2006 - less than a year after Jef Schwartz filed Chapter 7 - the couple got an adjustable rate mortgage from New Century for $348,500 at an initial rate of 8.6. "We went through tough times and I think they served a purpose when we wanted to have a loan," says Jef Schwartz, finance manager for an auto dealership. The couple are making their payments, he says, and "will be okay as long as the car business is okay."

Where: Tampa

Lender: Fremont Investment & Loan

Perry and Aurea Bracero Limes, who declared Chapter 7 bankruptcy in 1996 and Chapter 13 in 1999, got two Fremont mortgages in 2003 at an initial rate of 10.3 percent. Fremont won a final judgment of foreclosure a year later, but the Limeses sold the house. The couple, who filed Chapter 13 again in 2005, "don't regret the loan but do regret not understanding all the parameters," says Perry Limes, 61. "The subprime market takes advantage of those who have had difficulties."

[Last modified March 25, 2007, 06:25:40]