Homeowners swindled by convicted businessman Wesley A. Snyder will continue to get help so they can afford to make their mortgage payments, the Pennsylvania Department of Banking announced Thursday that.
Secretary of Banking Steve Kaplan said in a statement that 13 lending institutions have agreed to continue accepting reduced mortgage payments from victims of OPFM Inc., Snyder's bankrupt company.
Kaplan said nearly 650 homeowners will benefit from the extension. The agreement to accept lower payments was set to expire today, but will now continue at least through May.
When OPFM and five other companies related to Snyder's mortgage business filed for bankruptcy in September, the homeowners learned that their mortgage payments had dramatically increased.
A subsequent investigation revealed that Snyder had bilked customers and investors out of more than $29 million during a 19-year period.
When Snyder's customers, including 300 from Lancaster County, took out mortgages on their homes, they borrowed more money than they needed to refinance or purchase the homes.
The excess funds were given to Snyder, who promised to invest them. The homeowners gave him the money because he promised lower interest rates on their mortgages.
The customers, however, learned in September that Snyder, who pleaded guilty in December to federal mail fraud charges and faces up to 30 years in jail, held higher-priced mortgages in their names with 14 mortgage banks.
U.S. District Judge James T. Giles in October brokered a deal that let homeowners pay 75 percent of the higher mortgage payments or the original payment, whichever was higher. Mortgage companies promised not to foreclose as long as the payments were made on time.
All but one of the mortgage companies agreed to extend the agreement until May. Wells Fargo said it would honor the agreement only until the end of February.
The banking department increased its effort to assist Snyder's victims after U.S. Sens. Arlen Specter and Bob Casey and U.S. Rep. Tim Holden held a hearing in December.
The lawmakers also wrote to the chief executives of six banks, Fannie Mae and Freddie Mac, all of which are involved in the OPFM Inc. fraud case, and asked them to report on efforts to assist homeowners wracked with additional debt stemming from Snyder's misdeeds.
"It is frightening and disorienting to be the victim of a crime," Kaplan said in the statement. "The banking department will continue to do everything it can to mitigate the damage these homeowners have suffered as a result of Snyder's fraud."
E-mail: pburns@lnpnews.com