STAMFORD – Long before the Fusaro family came from Italy, a set of twin brothers from Russia built a pair of matching houses on West Main Street. Then Umberto Fusaro, himself a twin, came to Stamford from Italy, and worked as a construction laborer, saving until he bought the houses and raised his two sons there.
Now, the Fusaro sons might lose the homes Umberto worked so hard to buy.
The sons, Carmine, 46, and Biagio, 37, are suing their mortgage broker and the attorney who helped him for what they say were predatory lending practices, practices that led the Fusaros to refinance or take out loans every year from 2001 to 2008. The combined mortgage on the two properties plus a third home where they now live ballooned from $500,000.00 to almost $2 million, leaving them facing foreclosure on all three.
Biagio, who is learning disabled and graduated from the special education program at Westhill High School, was asked during testimony if he understood the problems he faced. “Somebody is going to come to my door, say get out of the house,” he said. “And I’m afraid and scared.”
The Fusaro brothers and their attorney, Mark Sank, say it all started in 1997 and 1998 when Umberto and his sons refinanced the properties at 453 and 457 West Main Street and the family home at 31 Brodwood Drive where the Fusaros now live. The Fusaros made their living by mowing people’s lawns, renting out the West Main Street apartments and running their mother Carolina’s luncheonette in the commercial building that joined the two West Main Street homes. Sank said they made no more than about $60,000.00 a year.
The firs refinance on the West Main Street homes, bought in 1979 and 1984, and on the Brodwood Drive house, bought in 1988, was for about $660,000.00 combined, $160,000.00 more than the original mortgages. The family needed the money in part to settle outstanding tax bills, Sank said. The local mortgage broker, at United National Mortgage, told the Fusaros that was all they would be able to do.
As they left the closing on that refinance, the Fusaros met a man who at the time worked there as an independent loan officer, in the parking lot. He told them, “When you need money, come to me,” according to Sank.
Court documents and court testimony detail what happened later. According to the Fusaros, that broker told Umberto, Carmine and Biagio in 2001 that he would rent the West Main Street properties as office space for $12,000.00 to $15,000.00 a month. Not only did they have to evict the tenants to do the work, losing rental income, but to pay for the construction they needed to refinance.
The broker, working with a series of attorneys, helped the brothers borrow more money for the following seven years. The first set of refinances under the Broker for the West Main Street properties in 2002 increased the mortgages on them by more than half. The next pair of refinances, in 2004, saddled the twin homes with a combined mortgage of $414,000.00. In 2006, a the height of the housing boom, the final mortgage on each of the West Main Street properties more than doubled from the previous one, to half a million each.
Meanwhile, the mortgage on the Brodwood Drive home where Carmine now lives with his wife, their two teenage sons and Biagio, increased by $100,000.00 with his each refinance, now at $750,000.00.
“[The Broker] said, ‘With a million dollars, you can do a lot of things,'” Carmine testified. “I said, ‘[Mr. Broker], you never gave me a million dollars.'”
Soon, the brothers needed to refinance just to be able to keep making the mortgage payments, Sank said. A mortgage expert set to testify during one recent hearing said that the practice is called churning, and sucks the equity out of homes through a series of refinances that generate more fees for brokers.
The Broker kept switching attorneys because some of the attorneys voiced opposition to the financial straits the Fusaros were getting themselves into, Sank said. When an attorney advised the Fusaros not to take a loan, he got them a new attorney. Finally, in 2004, the Broker began working with David Rogers, also named as a defendant in the Lawsuit. If the Fusaros were fearful about refinancing again, the Broker would show up at their house with groceries or money and convince them to sign, Sank said. The Broker could never meet before closings, and closings were conducted in a rush, the Fusaros said.
It was with Rogers as their attorney in 2008 that the Fusaros were finally unable to make mortgage payments or continue to refinance, and it was Rogers who told them to stop working with the Broker.
Rogers referred the Fusaros to Sank to help defend the foreclosure. Sank saw the complicated paper trail the Fusaros had kept.
“That’s when I noticed a lot of improprieties,” he said.
Sank told them he believed they might have a case against Rogers and the Broker. The lawsuit has not officially begun, but the two sides have testified in a series of hearings since January to determine whether the Broker’s assets will be essentially frozen in case he loses the lawsuit. Sank said he has an agreement with Rogers and is not seeking the same action, called a pre-judgment remedy, against him now. The hearings are to continue next month.
Testifying seemed difficult for Carmine. Questions had to be asked and reasked, and financial terms had to be explained. He said he did not know what subprime meant, but he had received subprime loans. He said he did not know how to operate a computer. In the unsigned complaint filed in civil court, the Fusaro brothers claimed they were unsophisticated and taken advantage of. “I didn’t fill out the documents,” Carmine testified. “I didn’t know these things.”
When the Broker’s attorney, John Vecchiola, tried to counter that claim by saying they ran a business, Carmine responded, “No, I have a job. I cut grass.” All the records they keep are kept by hand, he said.
“We always did what the lawyers told us,” he said.
The Broker testified that he graduated from the University of Bridgeport with a degree in management in 1996, and has been working as a loan officer and a mortgage broker since. He has been called as a witness by Sank, but has yet to testify as to his side of the story. He ultimately declined numerous requests for an interview. But he said, in between hearings, that he had always worked with Umberto, who got along well with him.
Some of the loans the Fusaros got were no-income, no-asset loans, so the Fusaros never had to say what their income was. In a circular exchange with Sank, the Broker said the Fusaros never had to provide income information or tax returns because the products they were getting did not require it, but at the same time those were the only products they could qualify for because they never provided the information. The Fusaros said they had their accountant send information to the Broker.
In some of the loan documents, the Fusaros’ income was listed as $13,000.00 a month, another as $14,500.00 which the Broker said Umberto told him was what they made. Sank asked the Broker if he thought that was a reasonable income, given the Fusaros’ modest profession. The Broker said he thought they made more.
In a series of questions after Sank introduced evidence of personal checks from Rogers to the Broker, his fees as a broker came under scrutiny. Ten checks total almost $120,000. Two checks totaling $15,000.00 were dated around the time of a refinance of the two West Main Street properties in October 2004. The Broker said a check for $8,000.00 was an origination fee and a check for $7,000.00 was a repayment for an advance loan he made the Fusaros at about that time. But there was no origination fee listed on the form required by the federal Department of Housing and Urban Development.
The checks were separate from other commissions listed on closing forms the Broker got for acting as a loan officer or mortgage broker on the refinances. The Broker said they were not reported in this case because he was receiving repayment from Rogers on a personal loan to the Fusaros.
At that point, Judge Kevin Tierney interrupted the questioning to advise the Broker of his Fifth Amendment right not to incriminate himself. He said he did not want someone to be prosecuted because of testimony that occurred in his courtroom, and he believed the testimony revealed that the form had not been adequately prepared.
He said no one can accept a fee based on an agreement, oral or otherwise, that is not in compliance with the form. He told the Broker he could hire a criminal attorney to be present at the next court date.
“I want to prevent people from committing economic and criminal suicide in my court,” he said.
The Broker has been sued by at least two other people over their mortgages.
Rogers declined to comment on the case.
The Broker has said in court that he and the Fusaros were friends, and he made them personal loans, in cash, for which they did not sign any documents. He said he lost his broker’s insurance because of the claim, and is unable to practice, he said. Times are bad for mortgage brokers, he said. He blames it on Sank.
“I’ve been dealing with attorneys all my life,” he said outside the courtroom one day. “I know what attorneys do.”
Carmine Fusaro said he had a simple wish to follow his father’s advice in life. Get up in the morning, work hard, and keep the lights on.
“I was always paying the bills on time,” he said.
The Fusaros face other challenges. Because the homes are empty, they are not earning the Fusaros rent. Pipes exploded in one of them last winter, causing water damages. Sank is defending the brothers against the foreclosures pro-bono as he pursues the civil case against the Broker and Rogers. The 73-year-old Umberto is in Italy, caring for Carolina, who is 70, ill and legally blind. He can’t afford a flight back to testify, so his name has been dropped as a plaintiff in the current hearings. Carmine’s youngest son Lupe, 12, is autistic. The challenge of raising Lupe only increases as he gets older but, Carmine says, God gave Lupe to him.
Carmine refers to everyone involved in the case, even outside of the courtroom, by their honorary titles, as authority figures rather than as peers. To solve problems in the past, the Fusaros put their faith in authority figures who told them where to sign. That is still true.
“If Attorney Sank wasn’t here,” Carmine Fusaro said, “I don’t know what I would do.”