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From Housing PANIC comes another story of a wannabe real estate mogul going bust (pun intended). Original story (’Straw buyer’ deals fuel tidal wave of foreclosures) from the Minneapolis-St. Paul Star Tribune:
She was 22 and tired of exotic dancing for a living. So Irene Thomas bet her future on real estate, hoping that becoming a landlord would be her first step toward exiting the stage.
With the help of Universal Mortgage Inc., a brokerage company in Brooklyn Park, Thomas signed the papers to buy a house early last year. And she kept signing. And signing.
In 90 days, with none of her money down, Thomas had $2.4 million in debt and 10 houses in her name, most in north Minneapolis. Nine belonged to officials of Universal, the same company that handled the transactions for her.
Less than 18 months later, Thomas was losing every property to foreclosure after the monthly payments weren’t made. Her credit ruined, she now says she was duped by a group of real estate insiders who sold houses at inflated prices.
The practice is so commonplace that real estate experts say it is helping fuel the nation’s foreclosure epidemic, which is destabilizing neighborhoods as home after home is lost to banks and other lenders.
I’m going to go out on a limb here and guess that not everything was on the up-and-up over at Universal Mortgage Inc. I can’t prove it - but based on the above story I’m going to call it a solid hunch.
We’re looking at $2.4 million in debt here with 10 houses. I’d like to see those loan files. How many were marked as owner occupied? How much money was it stated that she was making? How many rental agreements for the other homes in the files are legit?
All questions to probably never be answered - unless by a court of law in the fine state of Minnesota.
P.S. I have no idea if it is one of the girls from this video - but I wouldn’t bet against it either - unless of course all those girls use him for their financing!
The same type of lending scam is beginning to surface like a tsunami in my market. Seems some builders were involved as well as the appraisors they had in their pocket.
Great mortgage video? Did they actually use that?
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