Perpetrator or Victim?

Apparently, two reporters at the Washington Post have latched on to a perpetual victim of the Evil Mortgage Wall Street Man. Not once, but three times has her story been covered in a national newspaper since last July. She's part of an ACORN group that goes around chanting, "Save our homes!" But in the case of this ubiquitous interviewee, after signing on to a mortgage and moving in, she lived in her (half million-dollar) home scot-free for a year! She might have made one payment on the mortgage, if that. But it was "her home"!

In today's Post, staff writer Darryl Fears writes: "Foreclosure Protests at D.C. Offices Reflect Trend". He found our Wall Street victim joining ACORN in a protest in Baltimore yesterday:

"Veronica Peterson of Columbia was among the protesters yesterday. She held a sign that read, 'Foreclosure Free Zone.' In 2006, she said, she bought a $545,000 four-bedroom house with two loans at 11 percent and 8 percent, with a promise from her lender that she could refinance with a fixed rate after six months. Peterson, who is self-employed, fell three months behind on her mortgage payments and was evicted. She said no bank would allow her to restructure the loan 'because the loan agreement was fraudulent. They misrepresented my income. ACORN found all these problems. Legal Aid found problems.' 'My loan should never have made it through underwriting,' Peterson said. 'I had a 750 credit score. Now my credit is destroyed. I'm going to have to file Chapter 7 bankruptcy for the first time in my life. We're at the point where we're willing to get arrested.' Asked whether she could afford a home at that price, Peterson said yes, based on her income at that time as the owner of a child-care business".

This story didn't sound credible to some of us here on the blog. Randy, a commenter, did some digging and found out that Veronica's story has been mentioned before. Someone else in the comments section of the Post (a "steve1231") noticed it too. (By the way, the reporter of the article (Darryl Fears) is on record saying that those pesky Washington Post comments should be banned if they can't be filtered in advance . . . ).

The Documents in the History of Veronica Peterson:

First, we have an article from the Washington Post last year by Staff Writer David Montgomery, dated Thursday, October 2, 2008; Page C01:

The Foreclosees Protest An American Dream Turned Nightmare

"There is [ACORN protestor] Veronica Peterson, who bought her house on Fox Grape Terrace in Columbia for $545,000 in November 2006, and eventually lost it. The monthly payments were $4,450, even though her previous year's income was $50,000 plus child support from her ex-husband. Only later, when housing counselors brought it to her attention, did she notice that on the loan application the broker had inflated her income and listed assets she didn't own.

'These loans were weapons of mass destruction,' she says, getting ready for the Man with her son Ryan, 3, who is holding a copy of "David and Goliath.' 'They destroyed our credit, our lives, and they blew up in our face.'"

Second, we have the reporter who actually took the time to look up the loan. Edward Ericson, Jr., on 7/30/2008 did some digging for the Baltimore City Paper in "Victim Mentality":

"The online court and land records show that Peterson closed on the house on Nov. 3, 2006, with two loans from Washington Mutual. The main mortgage, for $436,000, had a starting interest rate of 8.5 percent, adjusting in December of this year to the London Interbank Offered Rate plus 4.99 percent. The second loan, often called a "piggyback," totaled $109,000 with an interest rate of 11.25 percent, according to The Sun.

Those two payments together would have totaled $3,386.17 per month. That's before property taxes, upkeep, utilities, etc. Peterson would have to earn at least $50,000 per year just to make her house payments.

But it appears that Peterson made few--if any--payments. The foreclosure was filed July 31, 2007. The balance on the main note then was $435,735.86, plus unpaid interest accrued from Jan. 1, 2007, plus $1,005.72 in late charges. This suggests that Peterson made, at most, one payment on her house: the December, 2006 payment. Given the grace periods typical in home-mortgage business, it is at least as likely that her first payment was not due until January 2007, which would mean she has made zero payments.

Had she made all of her payments, Peterson would have spent about $64,335 so far. Had she rented a similar place, she would have been charged around $2,500 per month--a total of $47,500 -- since January 2007. Instead, she apparently paid nothing".

Ericson's research was in response to an article by the Baltimore Sun entitled: "Rescue is Quirk of Timing": "But for hundreds of thousands more, people like Veronica Peterson, it comes too late".

On July 30, 2008, according to the Sun and quoted by blogger Psycho Phil, Veronica "Peterson is waiting for the eviction notice that will force her out of the $545,000 house she bought in Columbia two years ago".

The original July 30, 2008 Sun article is no longer available without a fee, but the photos are still posted.

Other blogger posts related to the July 30 article:

Today's Financial News: "Mortgage Crisis: No Pity for the Stupid"

On the Record: "When is a victim not sympathetic?"

Psycho Phil: "Baltimore Sun chooses the wrong ‘victim’"

Also, there are 417 comments on the Topix post from the original July 2008 Sun article, with little (understatement) sympathy toward the borrower.

Here's a YouTube video of her telling her story.