Subprime Lending in West Tisbury

Fallout from the many-headed monster otherwise known as the subprime mortgage crisis certainly seems to have no end, and now the crisis which is national and growing has landed — of all places — in West Tisbury.

The broader story which has been amply covered by the national press is by now familiar but no less repugnant: a bank, shady in reputation, loans money to a homeowner, knowing full well that he has no ability to repay. The monthly payments on the loan exceed the homeowner’s monthly income.

Add the fact that in this case the property which the homeowner has mortgaged is burdened by covenants which restrict it as an affordable homesite. This means that the resale value is limited and restricted.

The result is instant foreclosure.

In the case, the bank — Saxon Mortgage, doing business through Fremont Mortgage — now owns the West Tisbury property in the Roth Rogers subdivision off the Edgartown-Vineyard Haven Road. The homeowner has lost his home and his savings.

And the town has gone to court, seeking to reinstate the protective covenants which were wiped out by the mortgage foreclosure.

It is of course just one example of the reprehensible predatory lenders whose long tentacles have reached into every corner of the country, including the inner city neighborhoods of Baltimore, where the chief victims are women and minorities.

Credit goes to West Tisbury for going to court to enforce its covenants and for exposing Saxon and Fremont, already under investigation by the Federal Deposit Insurance Corporation. This week state attorney general Martha Coakley sued Fremont for predatory lending.

Makes a good case for sticking with a reputable bank when it comes to borrowing and calls to mind that old maxim:

Buyer beware.