Wednesday, July 03, 2002

Lender sells Erpenbeck loans

Avoids foreclosing on 2 homes

By Patrick Crowley,
The Cincinnati Enquirer

        Owners of homes threatened by a foreclosure in the Erpenbeck Co. scandal are no longer facing the possibility of eviction.

        Loans totaling about $325,000 for two homes in Boone County's Steeplechase subdivision have been sold by Guardian Savings of Cincinnati — which filed foreclosure notices June 7 — to First American Title Co.

        First American Title Co. is the insurer of Kentucky Land Title, which handled closings on the two homes. Kentucky Land Title now holds the mortgages and will seek to have them paid off by Peoples Bank of Northern Kentucky, said the company's attorney, David Wallace of Cors and Bassett in Fort Wright.

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        “This deal will stop any attempts to foreclose on those homes,” Mr. Wallace said Tuesday. “Other construction lenders are holding off any actions like this, so it is good to see Guardian is backing away from foreclosing.”

        Employees of Edgewood home builder Erpenbeck Co. are accused of diverting almost $16.8 million in checks made out to other lenders into its accounts at Peoples. Federal authorities are investigating, but no charges have been filed.

        Because the checks never made it to lenders who made construction loans on the homes, the first mortgages on 211 homes were never released.

        Guardian Savings chairman Louis Beck said it was never the bank's intention to evict the homeowners.

        “We don't operate that way,” Mr. Beck said. “These homeowners are innocent victims. They were current on making their payments, but because of what happened to them, they had a lien on their mortgage and we wanted to get that cleared up.

        “But we were told by the title company that until we initiate foreclosure, nobody was going to do anything to get this resolved,” he said.

        Guardian is trying to strike a similar deal with a third loan it made involving a different title company.


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