Mortgage Monopoly in Portsmouth?
In the comparison between Portsmouth, Ohio, and Westlake, Texas, that I made in my previous post, I emphasized the differences between the two towns. They don’t make things in Westlake, and they never have. They skipped the commercial and industrial stage that Portsmouth and many cities in the Northeast and the Midwest went through. What is now Westlake was for most of its history north Texas cattle country, but fairly recently, after a struggle between residents and developers over the future of the town, dramatized on NPR’s This American Life (click here). Westlake came to life economically as an “information-based” community. Well west of the Rust Belt, Westlake is where they make money, or where, more accurately, they make money on mortgages.
The way Westlake’s second largest employer, CoreLogic, claims it makes money is supplying information about the risks involved in selling or buying mortgages and insurance. But at least where Portsmouth is concerned it appears that CoreLogic’s main business is not selling information about but rather buying Portsmouth mortgages from local banks, including, and perhaps particularly, from American Savings Bank. By rough estimate, in the last ten years or so about eighty per cent of Portsmouth mortgages were CoreLogic. Though it is not a Fortune Five Hundred company, it appears CoreLogic is mopping up the floor in Portsmouth with the likes of Fortune Five Hundred mortgage companies like Bank of America, Wells Fargo, and Fifth Third, which rank nationally among the top mortgage giants. CoreLogic looks like it’s well on its way to monopolizing mortgages in Portsmouth.
City Officials: Portsmouth and Chillicothe
Who holds CoreLogic mortgages in Portsmouth? City officials, among others. Portsmouth’s unelected mayor doesn’t have a mortgage because he bought his house at so low a price that he didn’t need one. But the city auditor, the second most important city official, has a CoreLogic mortgage on a $134,000 house. The city solicitor, the third most important city official, has a CoreLogic mortgage on a $192,000 house on Willow Way, in the Hill section of the city. The solicitor paid $192,000, or about $50,000 more than the $142,820 valuation that the county auditor placed on it. The $192,000 figure is puny by the standards of Westlake but is way up there by Portsmouth’s.) The $50,000 is a much larger disparity (35%) than usual between the county auditor’s valuation and what a home sells for. Incidentally, there are five other houses on Willow Way, a short street, that have CoreLogic mortgages. Of the three members of city council who have mortgaged homes, two are with CoreLogic and the third is with American Savings Bank (ASB). Former police Charles “Matt Dillon” Horner’s home on 28th Street does not have a mortgage, but a dozen other houses on the street do, and eleven of the twelve are with CoreLogic while the twelfth is with Bank of America.
In the past I’ve compared Portsmouth and Chillicothe because the two cities have a lot in common. Do they have CoreLogic in common? Apparently not, at least not among city officials. Looking at the real estate records of Chillicothe city officials, I found a wide variety of mortgages, but CoreLogic was not among them. The Chillicothe mayor has had a number of mortgages, all with Chillicothe banks, especially with the Chillicothe branch of National City Bank, whose corporate name is now PNC. It’s what I would expect a politician to do—support the local economy by patronizing local businesses, especially for an automobile or mortgage. All other things being equal, whether you are a politician or ordinary citizen, why wouldn’t you want to support the local economy? The Ross County recorder has an extensive real estate history, which began back in 1973. Her mortgages usually had direct ties to Ross County and Chillicothe. In the last ten years, she has mortgages almost exclusively from the Chillicothe Fifth Third Bank. So for some time, with their mortgage choices, Chillicothe public officials have been supporting Chillicothe’s economy, not Westlake’s.
Portsmouth has a PNC branch and a Fifth Third branch in Portsmouth. but they are also-rans compared to CoreLogic. The Portsmouth Fifth Third branch resembles a poor cousin of the Fifth Third family. Because it can’t afford the spacious downtown building it now occupies, Fifth Third, under the coaxing of developer Jeff Albrecht, has tried to persuade the city government to move its offices to floors above the bank. But like the Marting building, the First Third building hides its age behind a deceptive façade. The facade ain’t really brick at Marting’s and neither is at Fifth Third. The heating and cooling systems in Fifth Third are reportedly a problem, as is the roof. Though it is not nearly as old as the Marting’s, the Fifth Third Building is unsuitable for city offices. The taxpayers of Portsmouth would be taking not much less of a screwing if Albrecht, acting like a procurer, is able to bring Fifth Third and the city government together.
Questions remain: why is so much of Portsmouth’s mortgage money ending up about a thousand miles away in Westlake when branches for Fortune Five Hundred companies, such as Fifth Third Portsmouth are hungry for business, including mortgages. What other banks besides American Savings Bank, acting as intermediaries, and subsequently as agents, are selling mortgages to CoreLogic? Is CoreLogic paying that much more than its competitors? Shouldn’t CoreLogic’s shaky financial situation and peculiar relationship with its former partner First American be a warning sign? If there was some tacit separation agreement between First American and CoreLogic that the latter’s main business would be selling information about mortgages and First American’s would continue to be buying and selling mortgages, or mortgage notes, CoreLogic’s footprint in Portsmouth constitutes evidence to the contrary. Furthermore, First American acknowledged in its 2011 filing with the Securities Exchange Commission that the fact that it and CoreLogic were now competitors, not partners, posed serious potential financial risks. There is an executive, Parker Kennedy, who occupies the same position at both companies! Isn’t that a clear conflict of interest?
Is there somebody in the financial circles in Portsmouth involved in a conflict of interest, at least where mortgages are concerned? Is there some suit in some hypothetical bank in Portsmouth who, in selling mortgages to CoreLogic, is selling out the citizens of Portsmouth, and is that hypothetical bank as financially shaky as CoreLogic? And do those homeowners in Portsmouth with CoreLogic mortgages understand that they are helping make Westlake the most prosperous community in America while Portsmouth remains among the poorest? Where’s the logic in that?
The city official who has most to explain is solicitor Mike Jones because his mortgages with CoreLogic, American Savings Bank, and the now defunct and disgraced Southern Ohio Growth Partnership are as illogical as any one person’s could be. Jones has proven as incompetent in the donut business as he has in the courtroom. He appears to be a sucker for overpriced mortgages, and it would not be a surprise to see him declare bankruptcy, following in the footsteps or our former mayor Jim Kalb, our current unelected mayor David Malone, and the next in line to be mayor, city council president John Haas.
Somebody who might be able to unravel the mystery of Jones’s mortgage with the SOGP is Bob Huff, that defunct organization’s director, but he is not talking about Jones, CoreLogic, or anything else. Maybe he is waiting for his day in court. On the day the new Grant Bridge opened, our hip angel of the airwaves, Steve Hayes, reported that Bob Huff, in the manner of Neal Hatcher, was giving passing motorists the finger. Now it may be Huff, left holding the bag, who is getting the finger. Huff’s home on North Hill Road, incidentally, has a CoreLogic mortgage.
|Bob Huff, yet another CoreLogic mortgagee, fired for allegedly cooking the books at the SOGP|