The Star Tribune is running a story about the mortgage foreclosures hitting the ccountry (http://www.startribune.com/local/west/17958114.html). As I was reading it, I was just shaking my head and wondering where common sense comes into play.
"Every so often, his workday over, Bradley Collin Jr. steers his Taurus station wagon out of his driveway and onto the flat, windswept roads near his Andover home. Then Collin gets to thinking about his debts, and the decision he and his wife made three years ago to invest in a get-rich-quick real estate scheme in Wright County. Last year, four houses that he bought in Otsego -- for a combined $1.2 million -- sank into foreclosure. Collin presses on the gas pedal, pushing his car past corn fields and grain silos, at speeds that top 70 miles per hour. "It's my way of unwinding and outrunning the guilt," said Collin, 27, a self-employed painting contractor and father of three."
"Norm Imholte, a truck driver from Freeport, said a builder paid him $50,000 for agreeing to buy a $425,000 house in St. Michael. The builder told him the house would be sold within 30 days and Imholte wouldn't have to worry about making a payment.
Imholte bought a new truck with the cash, but the house never sold and has since slipped into foreclosure. He recently got a call from a state Department of Commerce official investigating mortgage fraud. "I never had any business owning a $425,000 house in Wright County," he said."
"For Bradley and Sarah Collin, buying real estate in Wright County seemed like a ticket to a better life.
The couple and their three children, ages 2, 3 and 5, were living in a crowded trailer park in Blaine, when Bradley saw a newspaper advertisement touting real estate as the next quick way to make money.
"I didn't want to paint the rest of my life, and the trailer park scene was about as bad as parts of north Minneapolis," Bradley said.
Over a steak dinner at a Perkins restaurant, the couple met with two salesmen from Executive Premier Management Inc., a firm in Wayzata that described itself as a "property management company."
With no money down, they could buy properties in a fast-growing new subdivision in Otsego known as Otsego Preserve, near Interstate 94 and the Albertville outlet mall. They would get $5,000 in upfront cash for each house they purchased.
The Collins were also told that home values in Wright County were appreciating at 8 percent a year, much faster than the national average. At that rate, the Collins could make $24,000 a year for every $300,0000 house they bought in the county. They were told that rental income would cover their mortgage payments until the houses were sold.
Collin said the management company helped him apply for four mortgages within days of each other. The firm used a different lender each time, a way to hide from the banks the debt he was taking on and wouldn't be able to afford on his net income as a contractor, which averages about $60,000 a year. The "no documentation" and "no down payment" loans carried a much higher interest rate than conventional mortgages.
The couple purchased four houses -- each for about $300,000 -- hoping to quadruple their profits. The Collins received a $5,000 check after each closing. The cash payments were not disclosed on the mortgage statements sent to the bank, which Collin says he has since learned is illegal."
And we as taxpayers are supposed to help pay for this fiasco? I know first hand how easily life can change, medical problems, job loss. I know that there are many people out there who are losing their homes because of problems like that, but there were way too many abuses happening, banks gambled and too many people got greedy. Let them pay the price.
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