Capital One is Evans’s bank of choice
By Jeffrey Anderson
Ward 2 Councilmember Jack Evans mortgaged his Historic Georgetown rowhouse to apply for a $1.5 million revolving line of credit from Capital One in 2014 without telling his then-wife, Michele Evans, according to documents on file with the Recorder of Deeds and D.C. Council emails received by District Dig in response to a Freedom of Information Act request.
It was the third time Evans had applied for a mortgage loan since 2011, when Michele loaned him “in excess of $600,000” to renovate what the couple’s signed, notarized “Agreement” identified as “Jack’s House,” property records show.
Shortly after that Agreement, according to the property records, Evans had applied for an $800,000 loan with Capital One, which he received on January 26, 2012.
What’s unclear is why there is no public record that shows the bank was aware of the Agreement, which gave Michele the first lien on Jack’s house.
In fact, neither the 2012 loan, nor a refinance with a different bank in April 2013, included a recorded agreement between Evans and his wife that authorized him to mortgage his house before paying her first.
When Michele Evans contacted Capital One in March 2014, she was not happy, according to the emails on her husband’s Council email account. In her objections, she noted that she had borrowed from her elderly mother to loan Evans the renovation money–and she threatened to sue.
“Dear Helena and John,” she wrote to Notary Public John Nalls and Capital One Vice President Helena Sebastian on Monday the 17th–St. Patrick’s Day–at 7:05 a.m. “I Michele Evans do not intend to sign a release of my amount owed to me by Jack Evans for the amount of 850,000.00 in order for Mr. Evans to further encumber 3141 P street, NW.
“Should a loan be given or line of credit I will extend my legal right to pursue all entities that knowing of the recorded document extended credit beyond the ability if used to be service. The 850,000 used for the home renovation are a loan from my 80 year old mother and I carry a promissory note to her. I had no knowledge [nor] did I agree to added debt to the home as it puts my investment in jeopardy.”
Michele Evans declined to comment for this story.
Looming over Evans’s bank transactions is the saga of Kwame Brown, the former Council chairman who seven years ago pleaded guilty to financial crimes that included lying on an application for a home equity loan.
But whereas Brown was exposed and punished in a matter of months over a single loan he had paid back in full–within one year, five years prior– Evans and Capital One have avoided scrutiny for years.
What’s more, Evans’s personal dealings with Capital One have coincided with his role as Chairman of the Committee on Finance and Revenue. And he has used not just his Council email but his office to conduct his personal business with the bank, the emails show.
While it’s yet to be determined whether any of the irregularities surrounding his personal finances rise to criminal offenses, his earnings as a consultant to firms that do business with the city have captured the attention of federal authorities, who raided his home last week in connection with an ongoing investigation.
Neither Evans nor his white-collar defense attorney Mark Tuohey of BakerHostetler responded to questions and requests for comment for this story.
The scope of the federal probe is tightly guarded, but the public record of Evans’s financial troubles began to emerge when he approached Capital One for the $800,000 mortgage loan in November 2011, according to his emails.
The was just four months after Evans had signed the Agreement with his wife, promising not to borrow against his house without her knowledge and consent.
“Can you email [the documents] or call my courier Tom to pick them up. He is on his cell,” Evans wrote to Brian Baker, a Senior Mortgage Consultant with Capital One, on December 12, 2011.
For the second loan, a refinancing of the first one, Evans locked in a rate with Capital One, but went with Baker, who by then had joined 1st Mariner Bank in Bethesda.
“Brad, were you able to get me a lower rate?” he asks Capital One Mortgage Consultant Brad Andrews, on October 20, 2012. “Brad, I have been quoted a much better rate,” he then writes on October 31, “if you cant match that rate I may want to stop the process. Thanks jack.”
On November 6, Evans followed up again with Capital One: “Brad, I have decided to go with Brian Baker. His rate is so much better. Thanks for your service. Please refund my to my account. Thanks jack.”
As Jack Evans and 1st Mariner went through the loan process, Michele Evans filed the couple’s 2011 Agreement, which was effective “notwithstanding the lack of a recorded security instrument,” with the Recorder of Deeds on March 8, 2013, property records show. That made their private Agreement part of the public record and therefore even more enforceable.
Nevertheless, the loan went through and was recorded with the Recorder of Deeds on April 12, 2013. Again, The Dig found no recorded agreements between Evans and his wife that gave him consent to subordinate her lien.
Baker told The Dig last Friday that 1st Mariner, which later merged with Howard Bank, generally did not loan money as a secondary lien holder. “[1st Mariner] doesn’t take second place, they are first mortgage lenders,” said Baker. “They only do first lien loans.”
Baker referred further questions to Howard Bank Senior Vice President and General Counsel Joe Howard, who wrote in an email to The Dig: “Howard Bank makes first and second lien loans to both residential and commercial customers as part of normal day to day business. Brian’s group primarily does first lien residential mortgages…If a lien was recorded, then the bank would have been aware.”
Yet when informed that there is nothing on file with the Recorder of Deeds that indicates the bank even knew about Michele Evans’s first lien, Howard said state and federal law prohibit him from disclosing specific information related to a customer and ended the conversation.
Less than a year after refinancing with 1st Mariner, Evans went back to Capital One, in 2014, not only conducting his personal business out of his Council office but expressing his preference to do so.
“Hi Mr. Evans,” wrote Angie Clardy, Director and Senior Vice President of Legal Finance with Capital One, on January 29, 2014. “Thank you for pulling together the information to complete the process. Are you available around midday tomorrow? If so, perhaps I can take you to lunch at the Hamilton if your schedule permits? Otherwise, I will be glad to come down to your office. Please let me know. I look forward to meeting you in person.”
“Cant do lunch tomarrow [sic] but can meet at my office at 1030am. Does that work? Jack,” came the reply from Evans. Asked for specific directions, Evans instructed, “No come in front door. Right at top of steps. Straight to room 106. Jack.” (Evans’s office at the John A. Wilson Building is Room 106.)
By late February, Nalls, the notary public who had helped Evans on his loan with 1st Mariner, and Capital One’s Helena Sebastian, were in contact with one another, according to an email chain on Evans’s Council account.
“Good morning Mr. Nalls,” Sebastian wrote on February 25, “Capital One Bank is refinancing Mr. Evans Home Equity Line of Credit. Attached hereto, please find the title order for the Home Equity Line of Credit for $1,500,000. We will be paying [off] the existing Home Equity with the proceeds of this new HELOC. Please let me know if you have any questions. Thank you. Helena.” (In mortgage loan transactions, the bank issues a “title order” to begin the review of the chain of title to the property that is being used to secure the loan.)
“I would be happy to assist Councilman Evans with his refinance again!” Nalls replied, prompting a request from Sebastian on March 5: “Good Morning Mr. Nalls, I wanted to follow up with you on the status of Mr. Jack Evans title work for the Home Equity Line of Credit. When can I expect to receive the title commitment along with the revolving credit endorsement?” (A “title commitment” is what a title insurer discloses to all parties in the real estate transaction regarding all liens, defects, burdens and obligations on the property.)
By March 13, a Thursday, Evans looked like he was good to go, emailing Clardy at 8:13 a.m., “The settlement time has been changed to 1145 in my office thanks.”
The whole process hit a bump in the road, however, when on the following Monday, Michele Evans made her objections known, according to the following email exchange between Nalls and Sebastian that The Dig found among Evans’s Council emails:
“I have emailed Jack a revised Consent and Subordination Agreement which has been approved by our underwriting counsel and which Michele is reviewing,” Nalls wrote, on March 17, at 11:52 a.m. “If she is willing to sign it, we could remove the agreement as an exception and instead list it as a subordinate matter under the policy. I will keep you posted.”
“If she is willing to sign the agreement, we would have to update our underwriting and get it re‐approved. Otherwise, we will need Jack Evans’ executed election to rescind today,” replied Sebastian, at 1:34 p.m.
(Helena Sebastian declined to comment for a previous story, and The Dig did not get a response to a call to Capital One’s corporate headquarters in McLean, or to her cell phone. John Nalls declined to comment, citing the proprietary nature of his services.)
Meanwhile, a sense of anxiety appears to have settled in. “Any word from Michele?” Nalls writes to Evans, just two minutes later, at 1:36 p.m.
Thereafter, the emails show Evans re-submitting his loan application and waiting for re-approval of his Home Equity Line Of Credit, a process that stretched into April of 2014.
Finally, in May, the couple’s financial and legal entanglements began to wind down. “Before I agree or sign any release jack and I have some key terms to agree upon before a signed release and any loan is approved,” Michele Evans wrote to Nalls and Sebastian, on May 5, at 11:20 a.m., according to the emails on Evans’s Council account. “Today I will put together a list and first and paramount is legal counsel regarding a release. If we can agree to these terms than [sic] and only than [sic] will I be able to sign a release and release the title company and capital one.”
On May 12, 2014, at 10:19 a.m., on that same email chain, Nalls wrote her back: “Michele: It is my understanding from speaking to Jack this morning that the two of you have agreed to go forward with the refinance on the condition that a payment is made to you in the amount of $850,000.00 out of the new loan proceeds in full satisfaction of his obligations under your agreement and in exchange for a release of any and all liens created by the recording of the agreement in the Land Records. I further understand that the timing of the transaction is still under discussion. Could you kindly confirm this to be the case?”
Came the reply, about four and a half hours later: “Dear John, Jack and I have agreed that I will sign the release in exchange for 850,000.00 made out to me and at that point he is free to re‐finance. I would like to close this week and would like to be in attendance where we will sit at a table and documents will be signed and my check will be given to me at that time. Jack would cover all costs regarding [the lawyers] and they will remove the agreement on record. Sincerely, Michele Evans.”
The whole ordeal came to an end on May 16, 2014, when Evans was able to get the $1.5 million. He repaid his wife on May 21, land records show, along with his mortgage from 2003.
Six months later, the couple separated, according to records on file in Family Court. They divorced in March 2016.
*Correction: The story misidentified former Evans staffer Tom Lipinsky as Evans’s communications director in December 2011. Lipinksy did not join the office until May 19, 2014. The Dig regrets the error.
