Distressed family swamped by an underwater home

Swamped by an underwater home


After the housing collapse derails the American Dream, a cloud of uncertainty hangs over the Boateng family

Published on January 26, 2015

On a cold Sunday afternoon 10 years ago, Comfort and Kofi Boateng stood with Comfort’s mother and their three children before a quarter-acre parcel in a brand-new subdivision in the center of Prince George’s County.

The place was called Fairwood. They stepped onto Lot 71, an empty stretch of gravel, and closed their eyes and bowed their heads. Comfort raised her hands to the sky.

DASHED DREAMS: This is the third part in a series looking at the plight of the black middle class, particularly in Maryland’s Prince George’s County.
Part 1: Residents of Prince George’s, the nation’s highest-income majority-black county, lost far more wealth during the financial crisis than families in neighboring, majority-white suburbs.

Part 2: Half of the loans on newly constructed homes in one Prince George’s County subdivision during the housing boom in 2006 and 2007 wound up in foreclosure.

“We sanctify the grounds with the blood of Jesus,” Kofi said.

The land had once been the site of Fairview, one of the Maryland’s largest slave plantations. Now it was Fairwood, an 1,800-home subdivision that would soon become the richest neighborhood in the richest African American county in the United States.

A decade ago, Comfort and Kofi were at the apex of an astonishing journey they had made from Ghana in 1997, when they had won a visa lottery to come to America. They did not know it at the time, but they were also at the midpoint in their odyssey from American Dream to American Nightmare.

ABOVE: Comfort and Kofi Boateng sort through two large boxes of mortgage and financial papers as they talk about their financial situation in Fairwood.

Today, they struggle under nearly $1 million in debt that they will never be able to repay on the 3,292-square-foot, six-bedroom, red-brick Colonial they bought for $617,055 in 2005. The Boatengs have not made a mortgage payment in 2,322 days — more than six years — according to their most recent mortgage statement. Their plight illustrates how some of the people swallowed up by the easy credit era of the previous decade have yet to reemerge years later.

When they moved into the house in November 2005, Kofi was earning $82,740 as an IT consultant for a government contractor, and Comfort, then 43, was making $30,000 as an administrative assistant. But in the overheated mortgage market of the time, they said everyone told them that they could buy a $600,000 house.

They made a $60,000 down payment and all their mortgage payments for more than 2½ years — through September 2008. But the house was financed with subprime loans, which reset to higher rates after short time periods, creating what are known as “shock payments.” The Boatengs said they could not make their new higher payment, and, in the middle of the 2008 mortgage crisis, they could not refinance.

“I think the hardest part was the beginning,” said Kofi, now 55. “It was when I realized we really lost something. . . . Initially, we were arguing. But I guess it was because we were blaming each other for a mistake we both made.”

They came from a Ghanaian culture where credit is scarce and people built their houses with cash and lived in them for generations. Deeply religious, they found their real estate agent and mortgage broker at their church, Agape Life Ministries in Laurel. When their money got tight, they borrowed more and refinanced to take on more debt. Caught up in the mind-set of the time, they said, they thought they would be able to continue to refinance.

Kofi and Comfort Boateng.

“It wasn’t that we didn’t manage our money,” Comfort said. “We know in America, everyone owes something. We couldn’t get things done the way we expected. It happens to everybody.”

A growing debt

How one family went from no debt to owing more than $1 million.
*Debt does not include interest or other fees

July 1997
The Boatengs arrived in the United States

DEBT: $0

1999
Purchased a used Toyota Corolla for $2,000

Cars: $2,000
DEBT: $2,000

May 2000
Took out a mortgage on a three-bedroom town home in Germantown.

Cars: $2,000
Mortgage: $128,900
DEBT: $130,900

2000
Purchased a new Nissan Altima for $12,000.

Cars: $14,000
Mortgage: $128,900
DEBT: $142,900

2003
Comfort began to take out student loans.

2002-2005
Refinanced their Germantown home several times to fund improvements and to pay off some debt, including the cars.

Mortgage: $128,900
Cashouts: $95,000
DEBT: $223,900

July 2004
Refinanced their Germantown home to borrow $60,000 for the down payment on a new house in Fairwood, outside of Bowie.

Cars: $14,000
Mortgage: $128,900
Cashouts: $155,000
DEBT: $283,900

November 2005
Took out two loans to buy the new home in Fairwood.

Germantown mortgage: $128,900
Germantown cashouts: $155,000
Fairwood mortgages: $554,683
DEBT: $838,583

September 2006
Refinanced to consolidate the two loans on Fairwood home and some debt.

Germantown mortgage: $128,900
Germantown cashouts: $155,000
New Fairwood mortgage: $612,276
DEBT: $896,176

2006
Took out personal loans after their tenant in Germantown failed to pay rent. Comfort obtained two $20,000 business loans.

Germantown mortgage: $128,900
Germantown cashouts: $155,000
Fairwood mortgage: $612,276
Personal loans: $15,000
Business loans: $40,000
DEBT: $951,176

August 2011
Bank valued the home in Fairwood at $378,216. This was $238,839 less than what they paid.

2013
Comfort completed a master’s degree after taking out roughly $60,000 in student loans.

Germantown mortgage: $128,900
Germantown cashouts: $155,000
Fairwood mortgage: $612,276
Personal loans: $15,000
Business loans: $40,000
Student loans:$60,000
DEBT: $1,011,176

January 2015
The Boatengs are still living in the Fairwood home. They have not made a mortgage payment in more than six years.

Sources: Post analysis of financial records

Prince George’s County had the highest foreclosure rate of any county in Maryland, and Fairwood, despite its $173,000 median income, was the fourth-hardest-hit neighborhood in the county. Fifty percent of the loans made there in 2006 and 2007 went bad, according to an analysis by The Washington Post. Nearly one-third of the foreclosures were among African immigrants such as the Boatengs, even though they made up only 5 percent of the county’s black population.

The Boatengs opened up their financial records and provided The Post with hundreds of pages of bank, credit and mortgage documents for review. Every 90 days since May 31, 2010, they have received a letter threatening to foreclose on their home. They have been able to stay in the house through a confluence of factors: banks wading through a glut of foreclosures, the slow gears of the legal process, bureaucratic negotiations for mortgage modifications and an aversion by lenders to empty homes.

“It’s a transient feeling, almost like you’re in transit,” Kofi said. “It’s kind of like you have this feeling, a grief kind of thing. But then at one point you feel there’s hope. Then another time, the feeling of loss comes back again.”

Comfort and Kofi had met as teenagers in the choir at Calvary Baptist Church in the Adabraka area of Accra, Ghana’s capital and largest city. In 1987, the 100-member choir performed throughout the United States, including in Maryland.

Kofi stayed in Takoma Park and noticed all the foreign cars — Toyotas, Volvos, Mercedes-Benzes, Nissans — and thought the area might be welcoming to a foreigner like him.

Back in Ghana, he graduated with a degree in computer science at the University of Science and Technology in Kumasi, while Comfort attended the Agence D’or Secretarial School, earning the equivalent of an associate’s degree. They married in 1989, when she was 26 and he was 30. A year later, Comfort was pregnant with their first child.

Seeking better opportunities, they applied online for a lottery administered by the State Department to receive a U.S. permanent resident card. It was a long shot. Annually, less than 5 percent of the 1 million immigrants granted permanent residency enter the United States through the lottery, according to federal data.

But in June 1996, they learned they were going to the United States. Kofi boarded a Ghana Airways plane on July 9, 1997, headed to Maryland.

He got a job as an IT instructor. Comfort worked as an administrative assistant processing loans at a local bank, but it was a low-level job that did not require her to master the intricacies of lending.

“I didn’t know anything about loans and houses,” she said. “I was basically doing the data entry part of it.”

The first year the couple and their two children, 6-year-old Yaa and 2-year-old Kwabena, lived at a friend’s apartment in Gaithersburg. In 1998, they rented an apartment in that city. On May 5, 2000, they bought a three-bedroom townhouse through CitiMortgage for $128,900 in the Gunners Lake Village subdivision of Germantown. They had spent two years saving $3,000 for the down payment. Two years later, Kofi Jr. was born.

The Boatengs became citizens in 2003, allowing Comfort’s mother to get a green card and move in, eliminating the $300 weekly child-care costs. But with three bedrooms and two full bathrooms for six people, they needed more room.

Thanks to a booming housing market, their townhouse was worth $355,000. It was time to buy a bigger home.

For advice on neighborhoods, the couple turned to their 300-member church, where Kofi directed the choir. Most of the congregation is from Ghana or Nigeria. The church members suggested Prince George’s County.

“The prices were far better if you compare it to the same thing we’d have in Gaithersburg or Germantown,” Kofi said. “It’s half of what we would have to pay.”

Friends mill around outside the house during the special luncheon in Fairwood.

On a trip with their real estate agent to see Fairwood in late 2004, Kofi was struck by the trees, which reminded him of the ones around his college dormitory in Ghana. “I liked what they said about it, that they wanted to keep the botanical feel,” he said.

There were long driveways, new European cars, manicured lawns, intercom systems at front doors and wooden decks and few fences.

Fairwood had drawn other Ghanaians, as well as Nigerians and Cameroonians who were part of a general influx of West African immigrants into the Washington area, particularly into Prince George’s. The county has the second-highest rate of African immigrants per capita nationwide, behind only Baltimore County, according to recent census estimates.

In 2005, Kofi and Comfort met with one of the home builders in Fairwood, which sits in an unincorporated area of Prince George’s outside of Bowie, and they decided to build a house for a little more than $600,000. This was more house than they were expecting to buy, but they believed it would be a good investment. They said they thought it would go up in value, like their Germantown house, and they could use that equity to finance their children’s college educations.

“The purpose of getting the house was to get our kids through college,” Comfort said.

Their real estate agent told them they could afford it by refinancing the mortgage on the Germantown house — which they were going to keep — and cashing out the $60,000 in equity. That could serve as the down payment for the Fairwood house. At the time, Kofi’s credit score was 748, a superior rating that indicated that they were good at managing their debt.

Working through a mortgage broker, they applied for a loan, which they received from Lehman Brothers Bank under Kofi’s name. They said they were told that, based on their income, they could qualify for an interest-only, adjustable-rate mortgage. They would pay only the interest for the first five years, after which they would be required to make payments on the principal and interest. Such loans are riskier, and borrowers and have been shown to default at higher rates than a traditional 30-year fixed rate mortgage.

The Boatengs ended up borrowing $493,600 from Lehman Brothers, at an initial loan rate of 6.1 percent. In five years, it would reset to at least 8.3 percent. Their payments would start at $3,662 and go up to $4,336.

“I don’t think we really understood everything. . . . We didn’t take it too hard that this was going to be a problem. We thought we’d be able to manage it.”

—Comfort Boateng

They thought they would be able to refinance to a better rate in the future. In those days, refinancing was easy to get, and the Boatengs went with the tide.

“I don’t think we really understood everything,” Comfort said. “It’s very difficult to deal with everything, especially when you’re dealing with this huge document that you don’t really understand. We didn’t take it too hard that this was going to be a problem. We thought we’d be able to manage it.”

Workers started building the house in June 2005, and the closing was set for October. But in August, Kofi was laid off after his company lost its lucrative government contract with the Army. “The company said, ‘We have no job for you,’ ” Kofi said.

Now, the Boatengs faced a dilemma. Their home was nearly finished, and they had become emotionally attached to it. They were worried they would lose their $20,000 deposit, and they weren’t even sure they could back out of the deal.

“At that time, it’s not like we wanted to back out, too,” Comfort said. “We had already done everything for the house.”

They did not tell the bank that Kofi lost his job.

Banks are supposed to verify employment and income prior to approving a loan. Nevertheless, the loan closed, and the Boatengs also received a second loan to complete the financing through their broker’s company, a 30-year fixed-rate mortgage of $61,700 at 8.5 percent. They paid $29,000 in closing costs and put down a total of $73,000 in cash at the closing.

On Nov. 25, 2005, the family moved into their new home in Fairwood.

Life on the brink of foreclosure

Play Video

(Zoeann Murphy / The Washington Post)

With Kofi out of a job and so much of their money sunk into the new house, the Boatengs didn’t have enough left over to furnish it. A letter arrived stating that their first payment on the Fairwood house was due Jan. 1, 2006.

Kofi looked for a job and the couple sought a renter for their Germantown home. Their payments on the two houses amounted to $5,550 each month.

“We wanted to sell it,” Comfort said of the townhouse. “But some church members also have rental properties. So they said we shouldn’t, that we should rent it out. And we did it.”

In December, they found a tenant, whose rent check would cover the Germantown mortgage. And Kofi was hired by a tech company in Fairfax County, earning $82,000 a year.

But February and March came and went with no rent check. Soon they were in court asking a judge to evict the tenant, a process that takes months. “They couldn’t pay their rent,” Comfort said. “We couldn’t kick them out.”

Kofi went to Bank of America and took out a $5,000 personal loan to cover their mortgages for a month. When the case dragged on, Comfort went to Bank of America and received a personal loan for $10,000.

In subsequent months, with Kofi’s consent, she took out a $20,000 personal loan from Federal Credit Union in Montgomery County to start a home business selling Mary Kay products. The loan carried a 15 percent interest rate over a 10-year term.

She didn’t see the loan as a risk but as a way to help the family, and she says she believed that she could earn up to $7,000 a month with Mary Kay.

“My intention was to help, so we were able to make our payments and have some money around,” Comfort said.

She said she quickly earned director status and was given the choice of a leased car, a Pontiac Vibe, or the money in cash, $700 a month. The family decided to take the money.

To grow her Mary Kay business, Comfort said she took out another $20,000 loan from the same credit union, under the same terms, but this time she did not tell Kofi. She was sure she would be successful. But now she was juggling selling cosmetics and recruiting people for Mary Kay with a job search in her own field. She fell behind. Cases of merchandise sat in their home.

In late 2006, the couple decided to refinance their Fairwood mortgage and consolidate their debt, including the personal loans and some auto and student loans. They met with another mortgage broker, also a church member.

They eventually took out a $620,000 refinancing loan from Countrywide Home Loans. It was also an interest-only subprime loan, carrying a 6.29 percent interest rate and adjusting in two years instead of five. Their payment on the Fairwood house would rise to about $5,230 by November 2008.

As the broker walked them through their credit report, Kofi learned about the second $20,000 loan taken out by Comfort.

“I’ve never had my husband say anything about divorce until that money issue thing, the Mary Kay thing,” Comfort said. “He’s quiet. So when he’s extremely quiet, you know something is wrong.”

Comfort apologized for not telling him, but Kofi remained silent.

Comfort Boateng, a resident of Fairwood, sifts through mortgage and financial documentation in the family’s home.

In mid-2006, the housing bubble began to deflate. The next year, as home values dropped and the principal came due on many loans, more and more people could not pay their subprime mortgages. Wall Street had been using the mortgages to create securities with high returns, so the problem with subprime eventually helped touch off a worldwide financial crisis in 2008.

The Boatengs held out for a long time against this tide. They were not among the 1.3 million who went into foreclosure in 2007. As the crisis worsened the following year, with 2.3 million more foreclosures, the couple said they paid their Fairwood mortgage for as long as they could. But they knew they would not be able to make it when it readjusted upward in November 2008.

Zooming in on the affected area

maps

Sources: RealtyTrac, Home Mortgage Disclosure Act, Lender Processing Services, U.S. Census
STEVEN RICH and DARLA CAMERON/THE WASHINGTON POST

“We did not have the money at all,” Kofi said. “We knew there was no way we could pay $5,000 a month.”

With the credit markets melting down, the Boatengs could not refinance or borrow any more money. More than  2.4 million people were denied refinancing loans in 2008, according to a Post analysis. When the Boatengs thought about selling the Germantown home, they learned it was probably worth $30,000 less than what they owed on it. They said they also had some medical bills that added more than $4,000 in costs.

When the couple sought mortgage relief from Countrywide in April 2008, they said they were told that because they had not missed a payment they could not show a hardship. Countrywide was absorbed by Bank of America in July 2008.

The Boatengs made their last Fairwood mortgage payment on Sept. 18, 2008.

They applied for a loan modification through Bank of America. The bank said it made “seven attempts to help and modify the mortgage for the Boatengs” between 2008 and 2012, offering them a fixed-rate mortgage that would increase the amount they owed per month to about $4,900 but stabilize their payments, bank spokeswoman Jumana Bauwens said.

The Boatengs said it was too high.

“At that time, we were paying close to $4,000 and were struggling,” Comfort said. “And that was too much for us to pay. Anything (about) $3,000 would have been manageable for us at the time.”

At the time, the Boatengs were also getting help from the Massachusetts-based Neighborhood Assistance Corporation of America, a nonprofit counseling agency that worked as an intermediary between the bank and the Boatengs. But NACA learned the Boatengs owned more than one property, which under NACA’s guidelines prohibited the nonprofit from working on the family’s behalf to modify their mortgage.

The Boatengs received their first notice of Bank of America’s intent to foreclose on their home on May 31, 2010. The mortgage was 606 days past due.

“For me as a man, you feel like you’re failing everybody in your life,” Kofi said. “Your children, they come around and think, ‘Oh, our dad is successful.’ And you don’t feel successful at all. You feel, I’m working hard and I want us to succeed, and I want the kids to know that when you work hard you succeed. But it doesn’t look like it.”

As part of the financial rescue, Congress in 2009 created the Home Affordable Modification Program (HAMP), which provided relief for beleaguered homeowners by allowing them to modify the terms of their loans. Working through a church member who owned a law firm, the Boatengs asked Bank of America for a HAMP modification.

On April 28, 2011, they were told they were not eligible. The bank said the amount of relief the Boatengs needed to achieve an “affordable payment” exceeded the limits allowed by HAMP.

Their monthly loan payments were to go up again in November 2011, rising to about $6,000. On Aug. 16, 2011, the bank warned in a letter: “This could be a significant increase and result in a condition referred to as payment shock.”

Two weeks later, on Aug. 31, 2011, Bank of America sent an unsolicited “short sale agreement” to the Boatengs, which would require the couple to sell their home. The bank offered them $3,000 to assist with moving expenses and told them they had to agree to sell by Christmas Day.

The bank valued the house at $378,216.

Comfort and Kofi sent a letter to the bank on Dec. 16, 2011, pleading for assistance.

“We trust in your organization to work on our behalf in getting this mortgage issue settled so we can avoid foreclosure and start making an affordable payment,” the Boatengs wrote.

Comfort asked church members for help. One gave them $2,000.

The couple said someone — they do not remember who — referred them to the Brooklyn-based Litvin Law Firm, which specializes in foreclosure defense. The Boatengs said they started paying Litvin $750 monthly. This continued for two years, for a total of $15,000, they said. But then they got a call from an ex-Litvin employee who said the Boatengs should stop paying because the firm was not licensed to conduct business in Maryland.

“After Litvin, we realized we don’t have anybody,” Comfort said.

On Nov. 18, the Litvin Law Firm settled a complaint with the Maryland attorney general’s office that it had charged hundreds of consumers large fees but often did not help them avoid foreclosure or modify their loans.

Litvin can continue to operate in Maryland but under more strict procedures. The company is in negotiations with the state to determine repayment for consumers, said Assistant Attorney General Lucy Cardwell. The Boatengs may be eligible for part of that relief, Cardwell said.

Litvin officials did not return calls for comment.

Friends and church members, including Vida Gyimah, Abena Agyapong and Jennifer Adu, from left, dance at a memorial luncheon for Agnes Akosua Nipaa Ayim, Comfort’s mother, at the Boatengs’ home.

During much of this time, Comfort was unemployed or not working full time. In October 2010, she lost her administrative assistant job at Family Health International in Virginia. Her unemployment benefits ran out after eight months.

Beginning in 2003, she had been a part-time student in health-care administration at University of Maryland University College, with a goal of getting a bachelor’s degree and eventually a master’s. To help pay for the schooling, she took out student loans. She had earned two bachelor’s degrees, one in health-care administration in 2009 and another in organizational management in 2010, but by the time she completed her master’s in health-care administration in 2013, the debt had reached $90,000, including interest.

She said she went to school and took out the loans because she thought that was the American way to get ahead and earn more for her family.

“In my country, there’s a proverb that says we use fish to catch fish,” she said. “So before you can catch the fish, you have to use the fish. Before I can get to the money or level where I want to be, it takes money.”

Bank of America eventually sold its servicing rights to the Boatengs’ mortgage, and in 2014 things came full circle when the loan was sold to Nationstar Mortgage, which had taken over the mortgage assets of the bankrupt Lehman Brothers.

On July 11, Nationstar informed the Boatengs that all of their late payments dating back to 2008 were now due: $318,611.97.

Nationstar spokesman John Hoffmann said a foreclosure action has not been scheduled, and the company called the Boatengs this month to discuss their situation.

“We’re going to continue to reach out . . . and find ways to work things out,” Hoffmann said.

With $257,776 owed on the Germantown house, $969,037 owed on the Fairwood house, $55,000 in personal loans and the student loan debt, the couple who had never owned a credit card before moving to the United States now owe more than $1.3 million.

They currently earn about $100,000 a year.

The couple are also working with Housing Initiative Partnership, a HUD-certified housing counseling agency, for help in getting a loan modification. Their housing counselor, Lee Oliver, said their downfall began with the idea of buying a second home for more than $600,000. They were stunned they could own something like that, she said. “Then they just took a leap of faith,” she said. “Where I’m from, these houses were only for white people.”

Comfort’s mother died last January. Comfort had been working part time at a temporary agency in the home-health-care field but is now looking for full-time work.

“At a point, I was so frustrated that recently I said, ‘Why do I have to keep staying in America then? Why don’t I go back to my country and look for a job there?’ ” Comfort said.

Through their church, they had found their real estate agent, mortgage broker and dream house in Fairwood. And it all came to grief. But their church, in spite of it all, is still their rock.

“I guess for us, church plays a role,” Kofi said. “The foundation in our faith, that nothing happens for nothing. A scripture that is very, almost always on our heart, all the time, is: ‘All things work together for the good of those who love the Lord and are called according to his purpose.’ So that alone keeps you going.”

Database editor Steven Rich contributed to this article.

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