Foreclosures in Shelby Township neighborhood raise suspicions

Foreclosures in Shelby Township neighborhood raise suspicions

Mike Wilkinson / The Detroit News

SHELBY TOWNSHIP -- Dan DeKubber was a construction worker making $15 an hour when he says his boss suggested he buy a home. Not just any home, but a 3,800-square-foot, four-bedroom house in the northern Macomb County suburbs.

Price: $760,000.

Just 26 years old and single, DeKubber had neither the money nor the need for a McMansion.

"How can I possibly get the loan?" he asked John H. Floyd. Floyd assured him that he'd help DeKubber prove he earned enough to warrant the loan and also suggested that he'd make a $30,000 profit when he resold the house, DeKubber claims.

A year after the deal was done, the home is in foreclosure, DeKubber's credit is destroyed and soon, he says, he'll be evicted.

And the profit?

"I didn't get any money out of it," he said.

The transaction was one of at least seven in this otherwise affluent neighborhood that township officials considered suspicious. The selling prices were so high, officials ruled them out as "comparable sales" for the purposes of assessing property.

The foreclosures open a window on the mortgage industry's lending practices that allowed some people to get into homes that they couldn't have years earlier using high-interest, no-money down loans they ultimately couldn't afford. It's also an example of what happens when foreclosure ravages a neighborhood.

At one now-vacant home, once owned by Floyd, the pool sits full, fallen leaves staining the water. A makeshift chicken-wire fence surrounds it. For neighbor Sharon Nazione, it's a potential danger.

"We have so many little kids around here," she said.

Floyd is in no position to drain the pool or improve his property. He's in eastern Kentucky serving a 78-month federal prison term for conspiracy to sell hundreds of pounds of marijuana. He was indicted two days before he borrowed $825,000 for the 4,300-square-foot home in the Woodlands subdivision. Through contact with the prison's administration, Floyd declined to be interviewed for this story.

Big homes, mortgages

In the Woodlands subdivision in Shelby Township, the homes come in two sizes: big and bigger. Three-car garages, tiled pools and circular driveways are common.

The mortgages are supersized, too, and for some, living there requires the down payment of a life's savings.

But for a handful of folks, all it took was high-interest, no-money-down loans from financial institutions scattered across the country.

The Woodlands' sales caught the attention of township officials, including the assessor. The prices were well above what other homes in the area were going for, averaging nearly 40 percent more per square foot.

The township sent the FBI a list of homes that had been sold at prices so high that the township wouldn't use them as comparable sales, township Supervisor Ralph "Skip" Maccarone said. All seven of the foreclosed homes in the Woodlands were on that list.

The FBI said it cannot confirm whether an investigation is ongoing. Mark Bowling, the FBI's supervisory senior resident agent for Macomb, St. Clair and Sanilac counties, said his agents are actively working mortgage fraud cases throughout the county.

For Maccarone, the waves of foreclosure have cast a pall over communities throughout the area. Homes are vacant, creating a blight. Lawns are unkempt or nonexistent, windows are uncovered. One person's dream home sits beside an eyesore.

"This isn't what neighborhoods are about," Maccarone said.

Woman had 3 homes
Floyd bought his 4,300-square-foot Woodlands home in 2006, borrowing $825,000. It now sits vacant, its pool area unfinished, plywood covering one window; a screen door leaning against the back of the two-story brick home. It's one of three Macomb County homes Floyd owned that went into foreclosure.

Shannon Macleod, who has a child with Floyd, once owned three different homes in the Woodlands neighborhood, and borrowed more than $2 million for them. All properties ended up in foreclosure, as did a condominium she bought elsewhere in the township.

In August 2005, for example, she bought a house in the 12700 block of Partridge Run for $865,000. It went into foreclosure and in March, the home reverted back to Countrywide Home Loans, which lent her the money for the home. A pending sale on the property is listed at $559,000 -- more than $200,000 less than Macleod bought the home for; and less than the $596,380 that the township believes it is worth.

Macleod could not be reached for comment. But her brother Scott and Ray Tallerday, an attorney who represented Macleod in a bankruptcy case filed in June, said she was duped by Floyd.

Neighbors fear impact

Left in the wake of the foreclosures is a neighborhood trying to understand what happened. At first, they feared the high sales prices would drive their taxes skyward. When those fears were mollified by skeptical township officials, they worried about the vacancies that surround them.

For those who need to sell, those homes create obstacles. With so many homes on the market, it's difficult to sell anything.

"Are these foreclosures killing me?" said real estate agent Mike O'Donnell, who's trying to sell a home on Loon Court. "The answer is absolutely."

Nazione, who with her husband, Joe, lives on Partridge Run, can walk down her street and see several foreclosed properties. They have tell-tale signs: little to no landscaping and a for-sale sign. It's not what the Naziones expected when they moved in.

But Sharon Nazione said she believes most of the problem centered on the banks and other lending institutions who granted the big loans. "What's the matter with these mortgage companies? Shame on them."