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
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.
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| Bob Huff, yet another CoreLogic mortgagee, fired for allegedly cooking the books at the SOGP |
