Public housing tenant defaults on $1 million in mortgages

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This is one of those bizarre stories that, in an era of unprecedentedly lax mortgage standards based on the premise of moral hazard and the idea that values would always go up, is probably one of thousands like it.

According to the Boston Herald, "two out-of-state lenders gave more than $1 million in mortgages to a Dorchester woman who lives in public housing and barely speaks English, the Herald has learned."

That's right! Who needs proof of income? There's fees to be generated! 47-year old mother of two Angela M. Torres, has been left financially ruined by the recent foreclosures -- and she's now being investigated by regulators.

What happened? There doesn't seem to be any clear answer. The lender says that the commercial loans were based on the economics of the properties rather than the finances of the buyer, while Ms. Torres doesn't seem to have any idea what the heck happened.

Some experts say that the case appears to be a "classic" example of a straw-buyer -- an individual who is essentially paid off for the use of her name/credit in securing loans. When the real buyers don't come through, the straw-man is ruined.
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