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Scams teach man property lesson

A too trusting Mark McCray sees dream of owning his own home destroyed by mortgage fraud.

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By Lou Grieco, Staff Writer 1:36 AM Thursday, May 28, 2009

When Mark McCray met Kenneth McGee in 2004, McCray just wanted a home of his own, and maybe a rental property to help pay bills.

Within seven months, McCray owned four residential properties in Dayton, including a four-apartment building, though he was bringing home just over $600 a month.

“I was getting them cheap, supposedly,” McCray said May 21. “I never made a nickel off these places.”

McCray’s brief, wild ride as a wannabe real estate mogul started with an introduction in a bar, but took him through foreclosures and bankruptcy court. The ride isn’t over — he still owns two of the properties, because they couldn’t be sold at auction. His back taxes approach $7,000.

McGee was one of six people indicted last summer on federal charges in an extensive mortgage fraud scheme that affected 210 residential properties, including 205 in Montgomery County.

McGee, his father, and three other defendants have all pleaded guilty to felony charges and are awaiting sentencing.

McCray, 51, said he is still serving his own sentence of ruined credit and mounting debts, even though his only offense was naivete.

“They took away my dream, the American Dream to have one place to live at,” McCray said.

According to court records, the scams ran between 2002 and 2008, and most of the properties were dilapidated. The conspirators prepared and submitted mortgage loan applications to lending institutions across the country. The applications included documents that made fraudulent claims involving the borrowers’ incomes and values of the properties.

McCray, a cook at a Bob Evans in Miamisburg, didn’t have much money. Child support payments left him with just over $600 a month in take-home pay, according to U.S. Bankruptcy Court records.

But McCray ended up obtaining four properties between October 2004 and May 2005. By the time he declared bankruptcy in 2006, McCray listed $179,000 in assets and $410,000 in liabilities. More than $375,000 was in claims on those four properties, due to loans McCray could not pay back.

“I went into it blindly,” McCray said. “There was no way I should have been approved for those (loans).”

It started when he met Kenneth McGee through a mutual acquaintance. The acquaintance, who has not been charged with any crime, was a landlord. McCray thought he might be able to get into the game.

McGee said he would help him. He would even file the paperwork for the loans. McCray said he later found out he was misrepresented as the owner of a catering company.

With help from McGee, McCray bought his first house in October 2004 at 1712 Catalpa Drive. Montgomery County records show he paid $170,000 for a house the previous owner bought two years earlier for $23,250.

A month later, McCray bought a house at 2410 Home Ave. for $65,000. McGee bought that home for $6,000 five months earlier.

Both houses needed a lot of work. McGee promised to help with the repairs, but didn’t.

McCray also didn’t have the places inspected, and soon found they needed much more work than he originally thought.

“I never had the sense to do that,” McCray said. “That’s my fault, that I didn’t know the game.”

McCray quickly fell behind in his mortgage payments. He decided to buy two more properties through two of the convicted defendants, Kamal Gregory and Julian Hickman, and rent them out and raise more money.

One was a four-apartment building at 926 Windsor, which McCray bought for $115,000. The previous owner purchased it 17 months earlier for $88,000. The other was a house at 154 Irwin St., which he bought for $75,000. The previous owner bought it for $60,000 less than a year earlier.

These properties also had serious problems, McCray discovered. He spent money he didn’t have on repairs. He liquidated part of his 401(k) to make mortgage payments. He tried to get ahead, but didn’t. By summer 2006, he faced four foreclosure complaints filed in Montgomery County Common Pleas Court.

He opted to file for bankruptcy. Two of the properties were sold, but McCray remains the owner of the Windsor apartment complex and the Home Avenue house.

Though he no longer owes on the mortgages for those two properties, the property taxes continue to mount. He has tried to give the buildings to charities, but no one will take them, with back taxes still owed.

He and his girlfriend live with her sister. McCray said he managed to pay off his car last month, but believes his experiences have destroyed his chances of home ownership.

McCray said he now knows he was gullible, but feels used.

“There’s no way I can recover from this,” McCray said. “I don’t want to just survive. I want to live.”

Contact this reporter at (937) 225-2057 or lgrieco@DaytonDailyNews.com.

Mark McCray

Scam victim

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