By Joel Warner
By Michael Roberts
By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
Late last year, Hortense Ross finally moved out of her house. It was a long time coming.
For the past several years it had become increasingly apparent that Ross was having trouble taking care of herself. Her family helped out for a while, and the Denver Department of Social Services was called in now and again to provide support. But they finally called it quits, and in January, 77-year-old Hortense left the Poplar Street bungalow she'd called home for the past two decades and moved into an assisted-living center.
Hortense and her husband, Paul, had paid their dues. During the years they'd lived in the home, the couple had steadily made payments on their mortgage. But after Paul's death, Hortense's increasing isolation and what appeared to be a slackening grip on reality caused her to start missing payments. Not hopeful that Hortense Ross would ever pay off the remainder of the debt, the bank called in its loan, and a foreclosure sale was set for this past February. By then, Hortense Ross had built up nearly $40,000 in equity in the Park Hill house.
Which made her the perfect target for the small group of investors who try to make their fortunes off the misfortune of homeowners who lose their properties to foreclosure.
Even though the Poplar Street house was small and in imperfect shape, it soon attracted the attention of a number of such investors because of its equity. According to records at the Denver County Assessor's Office, the house is worth just under $59,000; the balance of the Rosses' loan on the house was only $14,000. So even after paying off expenses, whichever investor ended up with the house stood to make tens of thousands of dollars when he resold it.
Eventually, four separate investors would knock on Hortense's door. One of the first to come calling was a man named Edward Castleberry. He told Hortense he owned and represented a company called Vision Investments. He didn't tell her about his three dozen criminal offenses or the outstanding warrants for his arrest.
But Edward Castleberry was persuasive. On January 5 Hortense Ross gave him power of attorney, thus providing him with legal control of her affairs. Then, on the same day and in his capacity as Hortense's legal representative, Castleberry signed a quitclaim deed on the Poplar Street house, effectively transferring title on the property to Vision Investments.
Using the power of attorney, Ed Castleberry gave Hortense Ross's house to himself.
Castleberry was not the only one who took notice of the confluence of Hortense Ross's long record of regular mortgage payments and her declining health. Three months after Castleberry visited Hortense, a second foreclosure investor representing another company convinced her to sign over another quitclaim deed. Records at the Denver County Public Trustee's Office show that added together, the money the two investors paid Ross for her house came to just over $1,000.
In Denver, two grandmotherly women--Caroline Sandstrom, the chief deputy public trustee, and her assistant, Anita Dubas--guard against suspicious foreclosures. By any measure, it's an impossible job. Every week they must review and sign off on hundreds of documents concerning scheduled foreclosures. To investigate every one of them would be like trying to keep track of what is happening on thirty television channels at once.
"I love it," Dubas says of her job. "But I can't explain why." She moved to Denver in 1966 and since then has worked for the city in various departments and positions. She transferred to the public trustee's office thirteen years ago from the police department's I.D. bureau.
Sandstrom, a native of Chicago, first moved to Colorado in the early 1980s, taking a job in Steamboat Springs at the Routt County Treasurer's Office just as the bottom began falling out of the real estate market. The mound of foreclosures that piled up each week in her office provided a quick introduction to the business. She left the state in 1987 to return to Chicago but came back to Denver four years later when a corporate raider bought out her company. She has been at the public trustee's office ever since.
Colorado's trustees--and their deputies--are public employees. But this state is an anachronism; the 49 others use private trustees. In nine Front Range counties, trustees are appointed by the governor; Denver's trustee, Rosemary Rodriguez, is appointed by the mayor and doubles as the clerk and recorder. In Colorado's other, less busy counties, the county treasurer does double duty.
Generally speaking, the trustee's office is charged with holding deeds. When you purchase a house, the deed of trust is filed with the trustee. When you pay off your mortgage or refinance, the trustee lifts that deed of trust off the public record and, if necessary, records another one. When you can't or don't pay your loan, the trustee's office oversees the foreclosure proceedings.
Foreclosures sit on a teeter-totter across from the economy. When the economy is rotten, the business of foreclosures soars. In 1988, when Denver's economy bottomed out, 4,410 property owners lost their property through foreclosure. In today's hot real estate market, the situation is reversed. In 1996, for example, fewer than 700 property owners lost their homes in Denver County.