This morning the Boston Globe carried a front page story by Kimberly Blalnton about rising interest rates on variable rate mortgages. In classic Globe form the story is complete with a typical poster child – a single mother named Sana Masoud who owns a duplex in Brighton that she bought for $712,000 in 2004.
The facts the Globe story does not report are:
- Their poster-child purchased the property in 2004 from her relatives who were realtors.
- The property was never worth anything near $712,000 she "paid", but somehow the poster-child landed $660,000 of credit in 2 mortgages, obtaining the property with virtually 100% leverage.
- The realtor-relatives sold the house to her for 60% more then they paid for it, only 4 years before (but of course the profit was realized via the large mortgage loans).
- Realtors could find this information very quickly but the Kim Blanton or the Globe could not or did not ask.
Here is the real background, courtesy of a couple of bloggers:
Boston realtor and blogger John A Keith adds some additional facts:
Well, there’s a little bit more to this story.This owner had leveraged her investment property to the hilt, from the very beginning.
Let’s do the math. Ms Masoud purchased her two-family property in 2004 for $712,000. Her first mortgage loan was for $569,600 (information courtesy of the Suffolk Deeds Registry of Deeds). I see that the owner took out a second loan at the same time; in 2004, she borrowed $100,000, and in 2006 she paid it back and took out another loan, taking out $103,200;
Keith’s conclusion:
Her problem is exacerbated by the higher interest rate, but not caused by it. She already had a problem. Ms Masoud, you need to sell your property. Now.
But the comments made by readers of Keith’s post are the really amazing part:
Comment by confused
Cutting and pasting a letter to Kim Blanton from another site. [couldn’t find it –ed.]
Dear Ms. Blanton - I suggest that you check Masslandrecords.com before writing an article like the one that appeared today in the Globe.
Sana Masoud purchased the 2 family for $712,000 (!!!!! on $63,000 per year - really?) from Amira and Maisa Masoud. I don’t think it is a big stretch to surmise that these people are either her parents or other relatives. Again - 2 -family in Brighton for $712K? Massland Records also reveals that Amira and Maisa Masoud bought the property just 4 years before “selling” it to Sana Masoud for $437,800 (7/25/00 Book 25165, Page 116) (I’m no math wiz but that looks like a 60% profit). I’m going to be a little cynical here and guess that Sana Masoud and her family may have shared in some of the money that came from the bank (old fashioned fraud maybe?)
I am surprised that you didn’t mention whether you asked Ms. Masoud how on earth she qualified for a $596,000 1st mortgage and a $100,000 second (she refinanced the second late in 2006 - it’s now at $102,000 - again information easily found at Masslandrecords.com ) on $63,000 a year. It is a shame that lenders and mortgage brokers (who quickly make their huge commissions and dump these loans on what appear these days to be pretty reckless investors) give these loans out to people who clearly cannot afford them but I also think some digging is necessary before painting these buyers as victims.
I googled Maisa Masoud and learned he (also according to google) is a real estate agent.
Comment by Ken
Hi John,
The One-Year Treasury Constant Maturity rate is 4.11 as of 9/27 according to Bankrate. My post from HBB…
Everybody loves the Massachusetts Registry of Deeds , I researched the house as well. A few tidbits on the property. It was never worth anywhere close to 712k. It’s in a borderline neighborhood 2 blocks from a housing project, one block from a sketchy Store24 and right next to a main thoroughfare. Presently a two family one street away is listed on Zip at 579k (after three price reductions) and has a Zillow dream estimated value of 518k. Weirdest thing is that I lived in the house during my college years, the guy who sold it in ‘99 was my landlord…..
5 comments:
The internet never ceases to amaze. Since time immemorial the Globe has shored-up their point-of-view news stories with sad-sack losers who fit the broader story nevertheless raise more questions than they answer, questions that run counter to the story being pushed. Before Barnicle was sent packing, his stories were full of these sorry buggy whip makers who the Reagan revolution was leaving behind. Here the questions are all answered! Of course Rathergate was bigger stakes, but this has all the pieces.
The nice thing about being a preaching newspaper is that the choir you preach to doesn't question what you say or do. It's all gospel according to them. So the last thing they expect is for someone to do fact-finding. The Internet IS great because it shreds this newspaper and rightly so. Collapsed readership, circulation, and ad revenues happily confirm that all that's left for the Globe to preach to is its loony Leftist choir
My question is how the reporter came to use this homeowner in her story? Who told her that Sana Masoud would be a good example?
So I guess I'm a little late in seeing this post but I'll throw my two cents out there anyhow. Most of what I've read attacks the price at which Ms. Masoud bought her house, even going as far as suggesting some sort of under the table deal with a relative. If any of you stopped to actually do some real research instead of just typing some keywords into Masslandrecords.com, you'd have found that between Sept and Dec 31st of 2004 9 three-family homes (yes, her home is a legal three-family) were sold in the Brighton area with an Avg list price of $797,750 and an avg sale price of $741,500. So why the shock at the price?? Second, I saw a few posters rant about the "huge" profit made by Sana's relative who had purchased the home 4 years earlier. 2000-2004 were four of the biggest years for real estate that the country has ever seen. Profits of 60%-80% were avg for those four years in the Boston area. Look it up.
You guys are doing exactly what you're accusing the Globe of doing. Using half facts and skewing the story.
Not exactly.
Everything you read here and in the linked posts is someting that Globe readers do not get to read and that the professionals at the Globe either fail to find or fail to report.
The fact that she bought the home from relatives in a cash-out mortgage and was leveraged up to the eyeballs is relevant material that the Globe story did not report.
Post a Comment