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A year ago today, more than 800 customers of Wesley A. Snyder got a sinking feeling when the mortgage broker filed for bankruptcy.
Today, Snyder is in jail, his mortgage firm, Personal Financial Management Inc., is shuttered, his customers are shocked, sick, angry and confused.
A federal investigation last year revealed that Snyder had operated a Ponzi scheme that defrauded customers of about of $26 million.
The fraud affected nearly 300 Lancaster County customers who were saddled with larger mortgages at higher rates than they were promised by Snyder.
But many customers who could face foreclosure may get relief from the government's unlikely takeover of mortgage finance companies Fannie Mae and Freddie Mac.
Sen. Arlen Specter Wednesday asked James Lockhart, director of the federal agency that took over Fannie and Freddie on Sept. 7, for help.
In his letter, Specter asked Lockhart, director of the Federal Housing Finance Agency, which now controls Fannie Mae and Freddie Mac, to "explore all options" and "take action to ensure that the homeowners who need assistance receive it."
Banks such as Countrywide, Chase, SunTrust, Washington Mutual and Citi had claimed they have little leeway to make modifications to loans sold by Snyder because Fannie Mae and Freddie Mac are the holders of the mortgages.
But now that Fannie and Freddie are in federal hands, Specter has hope that Snyder's customers can finally breathe easy.Snyder is serving a 12-year sentence after he pleaded guilty to one count of mail fraud that cost the average borrower affected by the scam $29,000.
Specter wrote that Snyder's conviction "will provide little relief to the victims of his scheme, many of whom are struggling to make a much larger mortgage payment."
It is unclear how many of Snyder's customers have been able to work out agreements with their mortgage companies. Wells Fargo said in June it had reached "an agreeable solution" with all but 16 of the 172 Snyder mortgages it services.
President Bush signed a bill allowing some 400,000 homeowners to swap their subprime mortgages for more affordable loans. Some of Snyder's customers said they should be given a similar option.
E-mail: pburns@lnpnews.com
