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Former candidate could lose house to debt
Former state senatorial candidate Mark Tate could lose his Purcellville home to foreclosure.
The lender, California-based Fremont Investment and Loan, announced the foreclosure and impending auction in the July 18 edition of the Loudoun Times-Mirror. The public sale is scheduled for July 31, 9 a.m., on the steps of the county courthouse in Leesburg.
Tate bought the 2,556-square-foot house on a 0.17-acre lot for $594,666 on Oct 11, 2005, according to county records. He took out two mortgages in October 2005, with the property as security. The primary loan was for $535,199 at an interest rate of 8.5 percent, and a second trust was for $29,733 at 11.99 percent. Fremont Investment and Loan made both loans.
In Virginia, loans on property are secured by a deed of trust and a note, not the more common mortgage. The end result is the same. If the buyer misses payments, whoever holds the note can force a sale to recoup his investment.
Fremont agreed to a Federal Deposit Insurance Corp. "cease and desist" order on March 7. Fremont agreed to comply with the order without admitting or denying the charge that the company has operated "without effective risk management policies" in making subprime mortgages. The FDIC also charged that Fremont had been making loans "in a way that substantially increased the likelihood of borrower default. ..."
In a story March 20 in the Orange County Register, Fremont told a large number of its 2,400 employees it had put on leave on March 5 that jobs were gone for good.
Subprime loans are made at higher interest rates to borrowers with defective credit histories or with low or unverifiable income.
Currently, 1,168 Loudoun homes are in some stage of foreclosure, according to Realty Trac, an online database of foreclosure research.
Tate referred all questions to his lawyer, Ed MacMahon, who declined comment.
The county assessed the property in 2006 at $562,500. The property – like many in this area -- has since declined in value, and is now assessed at $481,200.
The average price of four of the other houses for sale on Kinvarra Place is about $532,000.
"Typically, if a client is three months past due [in making payments], the process [of auctioning the house] starts," said Steve Cowen, director of mortgages at The Middleburg Bank. The Middleburg Bank is not involved in the Tate proceedings.
Normally, Cowen said, the first mortgage covers 80 percent of the price of the house. The other 20 percent can be covered in a second mortgage. Tate's loans did not follow this format, Cowen said, nor did the interest rates follow the norm.
"[The] interest rates are higher than market," he said. This deviation from the norm could be explained by low credit scores, no clear sign of income or previous defaults on loans, he said.
Once the wheels are in motion, Cowen said, it's difficult to avoid an auction.
"[The borrower has] to pay all the interest that's due, attorney's fees, the loan, including the default," Cowen said.
Tate, a Middleburg restaurateur, was indicted in Loudoun County Circuit Court May 22 on 11 felony charges for not disclosing all of his campaign donations during his run for the Republican nomination for Virginia's 27th District Senate seat, which includes most of western Loudoun County. Tate lost that June 12 primary to Jill Holtzman Vogel.
Tate's trial is scheduled for Nov. 26 in Leesburg.
According to the agreement between Tate and Fremont Investment and Loan, the lender must give public notice of a foreclosure sale once a week for two successive weeks. The trustee can sell the property on or after the eighth day after the first ad appeared. Tate's home could go on sale as early as July 25.
Reporter Shannon Sollinger contributed to this article.
Contact the reporter at hhobbs@timespapers.com
I realize that Mark Tate is a near-public figure who nearly won a nomination to almost run for a potential state senate seat. I also realize that bank foreclosures are publicly available announcements. But to put this man's plight at the top of page one as the main story of the week, to me, is highly questionable.
Bill Travis
Posted by BillTravis
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It is highly qustionable what news value this story really represents. The article appears to be mean spirited mud slinging even when the "candidate" is no longer running.
Posted by Help_Save_Virginia1
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