Dubious Deals, Questionable Circumstances Mark NYC Speculator Who Stiffed Lenders Out Of $6.4M On 20 Mortgages Secured By 10 Homes Now In Foreclosure

In Jamaica, Queens, United Press International reports:

• Three years ago, Lloyd Varma, a man of no visible wealth, convinced 10 different banks to hand him 20 separate mortgages to buy 10 homes across southern Queens. Amazingly, he did this in 51 days just before the housing market collapsed - getting loans for $6.4 million with no money down.

• Then, one by one, Varma defaulted on each loan, and by the end of 2007, eight of the homes were in foreclosure - a kiss of death to a neighborhood's property values. Today, banks own four of the houses, while the others are in the process of being foreclosed. Varma's trail of wreckage highlights a fatal flaw in the system: Banks blindly handed over money to borrowers like Varma without thoroughly checking them out.

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• [Nonprofit Neighborhood Economic Development Advocacy Project's Josh] Zinner said Varma's ability to get so many mortgages so quickly raised questions about what Varma disclosed about his liabilities on his mortgage applications. At one point last year, Varma filed for bankruptcy, listing only three of his properties - not the 10 he owned. Varma's not talking. Reached by cell phone, he replied, "I am having trouble hearing you" before the line went dead. His lawyer, Nan Bedesi, also declined comment, saying, "I don't have to answer your questions."

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• Even though he has not paid the mortgage, Varma is trying to evict tenants for not paying rent. Just this month, he served eviction papers on families living in two of his foreclosed homes: 107-22 113th St. and 107-28 113th St. Dain Chandradat, 16, said her mother stopped paying rent after Varma quit paying gas and electric bills at the 107-28 address. "It's ridiculous," said Dain, a junior at John Adams High School. "They send notices they're going to shut off the gas and the electricity, so we pay the bills. We have the receipts."

For more, see He burst the bubble! Real estate speculator Lloyd Varma defaulted on 20 loans for 10 Queens homes.