Builder not buying couple's bid to back out
Officials with home builder K. Hovnanian Enterprises say a couple who claim their loan application was altered without their knowledge are actually savvy, well-heeled investors who just want out of a bad investment. But the Miami couple say they're unsophisticated buyers and alterations to a loan document made by a mortgage company affiliated with Hovnanian tricked them into buying property they couldn't afford...Chen-Walta said they assumed the information on the document was the same as on their handwritten statement and simply missed the changes. "The fact of the matter is we can't make the payments on those loans. My husband isn't working," she said. "We're not sophisticated investors."

Builder not buying couple's bid to back out
By Dick Hogan
April 21, 2007

Officials with home builder K. Hovnanian Enterprises say a couple who claim their loan application was altered without their knowledge are actually savvy, well-heeled investors who just want out of a bad investment.

But the Miami couple say they're unsophisticated buyers and alterations to a loan document made by a mortgage company affiliated with Hovnanian tricked them into buying property they couldn't afford.

J. Larry Sorsby, executive vice president and chief financial officer for Red Bank, N.J.-based Hovnanian — they operate in Lee County as First Home Builders —

said in a written statement that Cedrick Walta and Sandra Chen-Walta, of Miami, could qualify for mortgages on the three homes they agreed to buy.

Construction loans to build the houses total $766,382.

Between them, Sorsby said, the couple own 11 vacant lots without mortgages in the county.

But Chen-Walta said they tried and failed to get financing on their own and they refuse to deal with Hovnanian-affiliated Builders Mortgage.

They claim someone there falsely increased the value of their home from $350,000 to $700,000 and increased Walta's time on the job from six months to two years.

Their handwritten financial statement for the original application for the construction loan included their original figures, but a typed version submitted with the construction loan was different.

They signed up for the construction loan in July 2005, a month before Hovnanian bought the assets of First Home, which had been based in Cape Coral.

The loan was handled by Builders Mortgage, which is owned 51 percent by Wells Fargo and 49 percent by Hovnanian. David Martin, the Builders employee who handled the transaction, last week referred all questions to Hovnanian general counsel Peter Reinhart.

After a week of investigating, Sorsby said, "We don't know how the typed loan application got to be different from the handwritten one as this work was handled by employees of Wells Fargo and the construction lender."

Besides, he said, "The assets or employment history of the applicant was not considered as part of the underwriting" under the terms of the loan.

Sorsby maintains the Waltas are experienced investors and licensed real estate professionals who should have spotted the changes in the document. Cedrick Walta signed and initialed the altered application.

Chen-Walta said they assumed the information on the document was the same as on their handwritten statement and simply missed the changes.

"The fact of the matter is we can't make the payments on those loans. My husband isn't working," she said. "We're not sophisticated investors."

As for the real estate they already own, she said, "I used my retirement money when the stock market crashed to put it in real estate. That's my retirement."

Sorsby said the Waltas are trying to get out of closing on their mortgages because housing prices crashed after they signed their construction loans.

Two months before they closed on their construction loans for the three houses, he said, the Waltas made about $100,000 profit by selling a First Home house they owned.

Chen-Walta said Sorsby is exaggerating their expertise and that the dispute has taken its toll on her. "I am physically sick."

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