Three-decker bingo: Lenders continue to pump big money into condos despite foreclosure histories

To judge by sale prices for three-decker condominiums in Dorchester, the housing slump is over - at least at a few locations. The prices do have connections to names that repeatedly turn up in foreclosure filings, and they stick out like tree stumps in a flood of declining values, but that hasn't stopped the flow of credit - whether from small lenders or high-profile companies such as JP Morgan Chase.

One example of a unit with a rising price is a top-floor condominium in a three-decker at 43 Whitfield St, a few blocks west of Codman Square. After selling for $330,000 in February, 2006, the unit would be taken by foreclosure. In April of this year, Fannie Mae let it go for $65,000. Then, after less than two months and a certain amount of improvement, there was a new buyer who put up $339,000, with a 20 percent down payment.

The last transaction in June also stands out as a turnaround for the seller. This was a company called SRC Investments, whose president and treasurer, Sirewl Cox, figured in nine other transactions that have drawn foreclosure filings since last September. It was a director of the company, Lord Allah, who bought Unit 3 at 43 Whitfield St. from Fannie Mae in April. Later the same month, he bought Unit 1, for $45,000. Each time, he turned over the property the very same day to SRC Investments for $100.

Once SRC Investments took title, it received mortgages for both units from a lender based in Jamaica Plain, Capital Trust LLC. Though Capital Trust was lending to a company that had no record of previous borrowing in Suffolk County, the mortgage notes - for loans totaling $72,000 - were signed by Cox.

Attempts to reach Cox at phone numbers in Easton, Mass., and a broker's office listed in Dorchester were unsuccessful. Capital Trust has yet to respond to messages by email and phone asking how it could give mortgages to someone with a paper trail showing several recent bad loans.

On its website, Capital Trust says its approach to lending provides "speed and flexibility that traditional banking environments cannot provide." The website also says Capital Trust can "provide creative financing options for opportunistic real estate transactions" and "quickly fund loans that make sense."

But some observers of the real estate market in Dorchester say what doesn't make sense is the Unit 3 sale price of $339,000. One observer said, even with "top of the line" renovations, the market value would only run as high as $300,000.

Another observer familiar with the market said, "Based on what the current market conditions are, I won't imagine it would be three-anything."

When the unit sold June 3, the buyer on the deed was a Christine Hoyte of San Francisco, California. JP Morgan Chase gave her a mortgage of $271,000, on condition that she use the condo as a second home. To complete the transaction, she also gave power of attorney to a stand-in named Larneshia Bryant, whose name appears on the mortgage note.

But other documents show Bryant also has connections to Cox. The two of them were shown as joint tenants of a condo in another three-decker in Dorchester, on Roxton Street, where a lender filed to foreclose on the mortgage in February of this year. The unit is listed as being owned by Cox and Larneshia Bryant Alexander.

Over a period of three months earlier this year, there were foreclosure filings against Bryant on seven other properties. Two of the properties were bought from Cox in 2006, less than two months after he acquired them. Two others, also turned around in less than two months, were bought from another seller whose mortgage was signed by Cox with power of attorney.

Bryant has one other tie to Cox, through a business entity called Strategy Investments. The company was organized three years ago, with Cox as president and director, and Bryant as treasurer and secretary. The company bought two properties - one in Dorchester and the other in Roxbury - on which lenders would later file to foreclose.

Strategy Investments is listed on the directory of an office building at 40 Court St. for Suite 700. That's also the official address for SRC Investments.

The notary who stamped the mortgage note for Unit 3 at 43 Whitefield St., Rebecca Konsevick, was asked whether Bryant was supposed to represent the interest of the buyer.

"That was my understanding," said Konsevick.

When told about Bryant's business ties to Cox, the notary was asked which side Bryant was on when she signed the mortgage for Hoyte.

Said Konsevick, "I have no idea."

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The previous owner who lost all three units to foreclosure at 43 Whitfield St was Tariq Muhammad. He bought these units and another in a three-decker on Wheatland Ave. from Iris and Kelvin Sanders. The other two units at Wheatland Ave. were bought by Cox, and both also went down the road to foreclosure. Over the past three years, lenders have filed petitions to foreclose on a total of 12 units sold by Iris or Kelvin Sanders - all of them in Dorchester.

Muhammad also bought a three-decker for conversion at 310 Fuller St., with the help of a $120,000 loan from Kelvin Sanders. The house shows signs of repairs. After selling two units last year, each with 5 percent down payments for $355,000, Muhammad sold a third unit in February of this year for $365,000, with a down payment of 10 percent.

Just down the street, a realtor at Dorchester Associates, David Cahill, has been working on the sale of a whole three-decker which has been listed on the market for $369,021. When asked about the slightly lower price for a single floor sold in February - $365,000 - Cahill called the figure "ridiculous."

"When I see those prices pop up in the public record, I just shake my head," he said. "It's unbelievable."

By way of comparison, Cahill noted the difficulty in selling condos at the new development right next to Ashmont Station, The Carruth. Based on that, Cahill says, it would be harder to sell condos in most other parts of Dorchester, especially if they're farther away from rapid transit and commercial centers. The condos at 310 Fuller St. are roughly half way between Ashmont Station and the commuter rail stop at Morton Village.

"It's not an area where people are going to go shopping for condominiums," said Cahill.

But that didn't stop Marcus Emile.

He was the buyer at 310 Fuller St. who paid $365,000 and signed for a loan of $328,500. The loan was from Dreamhouse Mortgage Corporation. On its website the company says, "Our team of experienced mortgage experts is committed to your success and will go above and beyond traditional means to insure your satisfaction."

The unit at Fuller wasn't the first for Emile. Four weeks earlier, he bought another property, in the St. Mark's area, a three-decker unit at 15 Santuit St. for $340,000 - from Kelvin Sanders. The down payment on the unit was 10 percent and the loan was from Countrywide Bank.

As with previous three-decker acquisitions by Kelvin and Iris Sanders, there was also a single buyer who took multiple units. In this case, the buyer was John Castodio. One deed shows him as being from Stonington, Connecticut. One of his mortgages for 15 Santuit St. requires him to use the unit as a second home. On the other mortgage, the owner-occupancy requirement has been waived.

Cahill says the transactions at high prices make some owners more reluctant to sell at the normal market rate. And if more of the high-priced units go into foreclosure, he warns, there will be more converted three-deckers without active condo owners associations - which might limit the unit's next sale to cash-only.

"No bank in their right mind's going to finance it," he said.

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Less than two years ago, some three-decker condo units in Dorchester, often with freshly-made improvements, were selling for as much as $435,000. At least 90 units were sold in conversions - mostly in Dorchester - involving Michael D. Scott (and other variants of the name) and his associates or their business entities. So far, there have been at least eight foreclosure filings on the properties. Some of the units have recently been listed for sale, at prices as low as $174,000, and one unit - on Lafield St. - sold June 30 for $190,000. Less than two years earlier, Scott sold the unit to a buyer from Maryland for $375,000.

Some properties bounce from one foreclosure to another. This happened at 24 Gayland St., Dorchester, a conversion in which Scott figured. After the first buyer lost unit 2 to foreclosure, Scott bought the unit and sold it again at a higher price less than two weeks later, in February of last year. The new buyer also has mortgage trouble. A foreclosure petition was filed against her last month.

There have also been repeat foreclosures among Cox and his associates. After he lost a property he originally bought on Claybourne Street with Jacquelyn Pittman, Cox bought a property that Pittman lost to foreclosure on Reservation Road in Hyde Park. That purchase led to another foreclosure petition, against Cox.

Pittman also lost a property to foreclosure at 2 Rock Ave. in Dorchester. It was purchased in January of last year by Larneshia Bryant. A foreclosure petition was filed against Bryant in March of this year.

Due to an editing error, a section of the following article - first published in last week's edition of the Reporter - was inadvertently missing. The Reporter regrets the error. The story, printed here in its entirety, is also available online at our website, dotnews.com. The author, Chris Lovett, has spent his lengthy career in journalism covering Dorchester and the city of Boston. Lovett is the news director of BNN-TV's Neighborhood Network News. He is a frequent contributor to the Reporter and also maintains his own website, civicboston.blogspot.com.