Erie resident survives mortgage program

DeShandra Chappell was pushed to protect herself and her home.

This is what I remember vividly from my first interactions with Chappell in the summer of 2007.

Around this time, my colleague Ed Palattella and I were reporting / writing about a multi-level mortgage fraud scheme in Erie that involved over 200 properties across town.

We broke up the first stories of fraud in 2006.

A few years later, federal charges were laid regarding the mortgage scam, which involved buying dilapidated homes and selling them at inflated prices.

Most homebuyers, like Chappell, had little knowledge of the process.

When I met Chappell, it was a 28-year-old single mother who had closed her first home at 637 W. 3rd St. just over a year earlier.

She paid $ 60,000 for the two story, four bedroom, 1,800 square foot home and was thrilled with the accomplishment.

“At 28, you should have the idea of ​​wanting something more in life,” Chappell told me in 2007. “I’ve had credit problems in the past, so I thought to myself. someone was ready to give me a house, I will take it without hesitation. “

The government said the victims, which included lenders and individual homeowners, collectively lost more than $ 1 million in the fraud. Five people eventually served federal prison sentences for participating in the program.

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Chappell, now 43, is a caregiver with four children.

In a recent interview at her home, she explained how the joy of owning a home gave way to distress and panic on the morning of May 14, 2006, when her mother pointed to the Erie Times-News of That day.

The fraud investigation dominated the front page.

“I read this story. I saw names of companies and lawyers that I had dealt with, ”said Chappell. “I was young, I was naive and I was afraid.”

Chappell would later learn that his home’s value was inflated by a fraudulent appraisal as part of the scheme.

The co-owner of the business that sold the house to Chappell bought it for himself for less than $ 15,000 in March 2002 – about four years before Chappell’s purchase – and then sold it to his own business. for $ 30,000 in August 2002.

Plus, there was virtually no improvement on Chappell’s house that would justify its purchase price of $ 60,000.

Chappell picked up the phone and called both the St. Martin Center, an Erie social service agency that helps first-time home buyers and low-income buyers, and the Pennsylvania Human Relations Commission.

Chappell is reportedly filing a housing complaint with the HRC, claiming to be a victim of abusive lending and discrimination in buying real estate on the basis of his race and gender.

Chappell is biracial.

Representatives from both agencies discussed the details of the purchase of Chappell’s home, including variable interest rates and lump sum payments on his mortgage.

Ultimately, Chappell was able to secure a more financially stable fixed interest rate, as well as much needed peace of mind.

“What I was trying to do was protect myself and get confirmation that my mortgage was legitimate and that I wouldn’t lose my house because of it,” Chappell said. “I wanted someone to check on me that I was okay. They helped me a lot. They told me I would be fine as long as I kept paying.

“And I never missed a mortgage payment or had a late payment,” Chappell said.

Chappell admits that as the investigation progressed and the newspaper continued to report about the scheme, its players, and the homebuyers involved, she was constantly concerned about losing her home.

“As it progressed I was careful,” said Chappell. “I know some of the people who were caught in this lost money. Some were unable to stay at home. I feel lucky to have received good advice and help.

For the past 15 years, Chappell has improved her home whenever she had the time and money to do so.

There is a new porch and stairs. She replaced the pipes and had new windows installed, among other improvements.

“It’s a good house for us and we are comfortable,” she said. “I really didn’t have any major issues.”

Every now and then, Chappell thinks about someday buying an even bigger house for herself and her children in a different neighborhood.

However, she is cautious about such a decision – for obvious reasons.

“You should always want more,” Chappell said. “But I have to admit that the idea of ​​buying, of selling, this whole process still scares me because of what I’ve been through.

“Like I said, I feel lucky that my kids and I can have this house,” Chappell said. “I still have such a problem of trust with this house. I know it goes back to all of this. “

Contact Kevin Flowers at kflowers@timesnews.com. Follow him on Twitter at @ETNfleurs.