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Expert snagged in subprime trap

By John Rebchook, Rocky Mountain News (Contact)

Published July 11, 2008 at 9:05 p.m.

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Kevin Marchman, a former official at the Department of Housing and Urban Development, got caught up in a foreclosure on a condo. "I would not say I was a victim," he said. "But I would say I was not told the complete truth."

Photo by Photos By Darin Mcgregor / The Rocky

Kevin Marchman, a former official at the Department of Housing and Urban Development, got caught up in a foreclosure on a condo. "I would not say I was a victim," he said. "But I would say I was not told the complete truth."

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You would be hard-pressed to find someone more knowledgeable about foreclosures than Kevin Marchman.

The Denver resident is a former top official at the Department of Housing and Urban Development, led the Denver Housing Authority for four years and heads a Washington, D.C., based nonprofit group, the National Organization of African Americans in Housing.

That agency serves as an advocate for affordable housing and for cracking down on "shady lending practices that have burned many of the nations riskiest subprime borrowers."

Yet, Marchman, and his wife, Desiree, got caught up in a foreclosure action.

"I feel like I have an obligation to talk openly about this," Marchman said. "I want people to read this and think, 'If it can happen to Kevin, it can happen to anybody.' "

Here's what happened.

In 2006, the Marchmans bought condo No. 406 in the Downing Street Station at 2900 Downing St. for $292,000. It is now in a $262,800 foreclosure.

They bought the 1,151- square-foot condo across from a light-rail station for their daughter, Noah, who was attending college on the East Coast.

When she decided not to move back to Denver, Marchman decided to rent it.

Marchman was sprucing up the apartment when he noticed fliers in other units from an investment group.

The group, he said, was out of Baltimore, although he doesn't remember its exact name.

The group was supposed to rent the condo, pay the mortgage and when they sold it, they would take 75 percent of the profit, and Marchman would get 25 percent.

"It didn't sound to be too good to be true," Marchman said. "I would not say I was a victim. But I would say I was not told the complete truth."

The condo is saddled with a 9.185 percent subprime loan, and as part of the deal the investment group was supposed to use its financial clout to get a better rate.

The foreclosure was recorded Feb. 13, and Marchman said he learned about it when he opened an envelope from the lender that said he was in foreclosure.

"I was shocked," Marchman said. "And tell you the truth, I was kind of heartbroken. You take this stuff personally. It is like somebody is trying to rip you off."

He said he remembers attending a Denver Foreclosure Task Force meeting last year, and experts testified that you have to open your mail from lenders.

Too many people ignore the first warnings about being in default, making it more difficult to later work out the foreclosure.

Marchman expects to resolve his foreclosure in the next two weeks.

"If I hadn't opened that envelope, I would have thought everything was fine," Marchman said.

"And when you called me and said, 'Kevin, did you know you are in foreclosure?' I would have said, 'What are you talking about?' "

Zachary Urban of Brothers Redevelopment Agency said Marchman isn't the first person sophisticated in financial matters to get caught in a foreclosure web.

"Without mentioning any names, you would be surprised by some of the calls I get from people in power and respect in this state," Urban said. "Even with a comprehensive knowledge of the do's and dont's, you can fall victim to schemes that sound legitimate."

Marchman said he learned a valuable lesson from the foreclosure experience that will make him even more sensitive to people in danger of losing their homes or having their credit ruined, and more of an advocate against predatory lending practices.

"After 30 years in the business, I'm seeing it from the other side," Marchman said.

rebchookj@RockyMountainNews.com or 303-954-5207

Comments

  • July 12, 2008

    11:15 a.m.

    Suggest removal

    MnD writes:

    Expert? Try idiot.

    College kids do not need Mommy and Daddy to buy them a $292K condo.

    Experts don't purchase condos with 9.5% sub-prime loans.

    Experts don't turn over responsibility for making payments on property they still own to "investment groups" they learn about from doorknob flyers with a name they can't remember.

    I'm not surprised this person is a former top government housing official, but it sickens me to realize these are exactly the types that are going to benefit from the taxpayer bailout of sub-prime borrowers.

  • July 13, 2008

    9:36 a.m.

    Suggest removal

    fastnloose writes:

    power and respect do not equal smart! MnD hit this one right on the nose.They said this man was in a position of power at one time,that is scary in itself.

  • July 13, 2008

    5:49 p.m.

    Suggest removal

    Phil_Rice writes:

    Additional info about Kevin Marchman and his neighbor Bill Clanton are posted at:

    http://www.mkgappraisal.com/marchman.htm

    Kevin Marchman is a good story teller.

  • July 14, 2008

    6:23 a.m.

    Suggest removal

    jacka writes:

    I say wake up dude, but you appear to have noticed that yourself.

    Readers also notice ... he didnt need a handout!