SF Weekly Letters

A Fool and His Money
You got to know when to fold 'em: Am I really supposed to feel sorry for someone who invested without doing any research first [“Misdeeds,” Anna McCarthy, Feature, 8/5]? And for someone who expected to earn 10 percent interest per year? When will people wake up to the fact that investing is just another word for gambling? Andy Narraway gambled all his money and he lost it. So what? If he had blown almost $2 million at a craps table in Las Vegas, would SF Weekly have written a cover story about him?

Fraudsters like James McConville should be prosecuted to the fullest extent of the law, but I have no sympathy for millionaires who make idiotic decisions. It makes you wonder how they got that rich in the first place.

John Simonian

San Francisco

Lien, mean: Okay, let me get this straight. Millionaire invests in risky second mortgages with shady real estate investor with a criminal past and it's whose fault — the bank's? Not quite.

I'm a career real estate appraiser, and do work for Wells Fargo. I absolutely agree that Wells Fargo's underwriting standards are ridiculously lax from what I've seen, even to this day, and its loan operation is geared toward speedy volume rather than quality.

However, while I hate to defend Wells Fargo, a first-year law student could tell it has no liability to the investor in the second mortgage in this case. It, too, would have a clause that prohibited second financing on top of its first note, so this is obviously a case of title insurance fraud, being that the second loan was never even recorded onto the properties in question (you could not sell a property without satisfying all the lienholders at the close of escrow).

The bank with the first note has absolutely no liability to do due diligence for the second lienholder, and the second lienholder has absolutely no right to rely on the underwriting of the first note for his or her investment decisions, as the second lienholder did not pay any of the costs associated with the due diligence for the first note (appraisal, underwriting, etc.).

From the article, it appears that James McConville and company acted criminally and likely had a title officer and probably a shady appraiser in on the fraud. Good luck trying to catch and get any money out of any of those characters. Chasing down the title company for fraud would be the best bet, as it would have the deepest pockets. Its excuse of “losing the file” is completely absurd and borders on criminal.

Unfortunately, it also appears the investor bears a lot of responsibility for not doing basic real estate due diligence of his own. To try to blame this on the bank is barking up the wrong tree entirely.

 Name withheld by request

Blog Comments of the Week
In response to a post on SF Weekly's news blog, the Snitch, about a man who allegedly killed his dog with an ax: As a friend of Joe [Byrnes], I can say without reservation that he loved his dogs very much and took good care of them until the last several months, when mental illness took over his life. He was a multitalented and gentle man.

His many friends have tried to help support him, but he needs trained psychiatric help so that the old Joe can come back.


In response to a Snitch post about BART union negotiations: My problem is that the system is too expensive, because you have both mismanagement and overpaid workers. Since when does a job become an entitlement program? Why don't BART workers, from the general manager to the janitor, need to be accountable for their retirements? Why is the entire burden placed on the riders and taxpayers?

The 7 percent employee contribution should be paid by the employee. The employee should also pay a reasonable portion of medical; between 25 and 30 percent of the total cost. These are common-sense items that should not be negotiated by the board.

BART should be cutting to make the system more affordable and appealing for the public. Union workers seem to be ignoring basic business: If you provide bad service at an expensive price, you drive customers away. These jobs and the [BART] system are subsidized; it does not earn one dollar in profit. The argument should be, “Is the public getting what it pays for?” and the answer is a resounding NO!


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