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Sub-Prime Lending's Low Blows
[FINAL Edition]
The Washington Post - Washington, D.C.
Subjects: Professional ethics; Subprime lending
Author: Fisher, Marc
Date: Mar 18, 2003
Start Page: B.01
Section: METRO

When Eugenie Duncan's husband, Vincent, died last fall, he was 87 years old, a retired tinsmith who had never owned or used a computer. Imagine, then, her surprise when she discovered a copy of their 1998 federal income tax return on which Mr. Duncan's occupation was listed as computer programmer.

"She wound up getting $3,200 in cash and savings out of the loan, but she had to pay $12,800 up front to do so -- and the loan papers don't tell you any of this," says Patrick Malone, a D.C. lawyer who, along with Jean Constantine-Davis of the AARP retirees lobby, represents Mrs. Duncan and five other homeowners who are seeking damages against Equitable and the now-bankrupt lender, First Government Mortgage Corp.

In addition to Mr. Duncan's sudden expertise in computers, which jacked up the Duncans' "income" from $18,600 to $34,000, the homeowners say lenders used their creative powers to turn them into "bookkeepers" and "accountants" on phony tax returns used to back up their loan applications.

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