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Triple-decker condo flipping still going on in Dorchester

By adamg on Thu, 07/24/2008 - 11:05pm

Chris Lovett examines some interesting real-estate deals of late.

Neighborhoods: 
Dorchester
Free tagging: 
housing prices
Condo flipping


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Comments

By Marc on Thu, 07/24/2008 - 11:20pm.

Thanks Adam, that was about the most informative article I've ever read about local real estate shenanigans. That guy Chris Lovett has some balls to put that stuff out with his name on it, and I hope he keeps it up.

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By Marc on Fri, 07/25/2008 - 12:55pm.

I submitted the story to Channel 7 news, perhaps we should submit to the herald or other investigative reporter groups to encourage more in-depth followup

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By anon on Fri, 07/25/2008 - 2:59pm.

How about also calling the Boston FBI office, and the loan companies that are getting raked over the coals?

Might also drop a tip to the IRS...

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By merlinmurph on Fri, 07/25/2008 - 7:56am.

Man, after reading the article, I'm dizzy trying to follow the bouncing ball.
I can't figure out where the scam is. Anybody?

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By Gareth on Fri, 07/25/2008 - 8:35am.

Here's how the scam might work.

Arthur Scam gets an inflated loan for the distressed dive (say 300K), and buys same from Barry Scam. Barry Scam puts the bank's money in his pocket, with a kickback (say 50K) to Arthur Scam.

Arthur Scam then fails to pay the mortgage and the property is repossessed. Poor, poor Arthur! (Except for the kickback, that is).

Barry Scam then buys the newly distressed dive back from the bank for 75K, and sells it again... to Charles Scam. For 300K. Lather, Rinse, Repeat.

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By Aaron Weber on Fri, 07/25/2008 - 9:09am.

Man, it took me awhile to figure out what was going on there. But ... something is definitely not right in that situation.

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By Gareth on Fri, 07/25/2008 - 9:47am.

I even wonder whether the director of the company, Lord Allah, is a fictional entity.

Oh, no. I said too much; I said it all.

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By anon on Fri, 07/25/2008 - 8:36am.

Money laundering is a possibility. The inflated prices would translate into an eventual loss of 10-20% upon resale, which is an acceptable cost for legitimizing dirty money. Mortgage fraud might be part of the mix, too. With the owner pulling equity out of the property and then foreclosing... I'm not an expert in this subject.

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By anony moose cow ard on Fri, 07/25/2008 - 9:02am.

I get a kick out of the high name recognition of the banks involved. We're supposed to bail these clowns out??? Again and again? Charge a few bankers with fraud for originating the loans or buying them from the mortgage brokers. If the brokers couldn't sell them, then the investors would get burned. Then you'd see better self policing in the market.

They will absolutely destroy themselves. I say the hell with them.

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By jchristian on Fri, 07/25/2008 - 4:52pm.

after reading. The buck has to stop somewhere, it just usually stops with "us". That's a great site- really interesting stuff there.

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By Rob on Fri, 07/25/2008 - 9:29am.

I wish Chris would post more frequently. He has great information and insight.

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By anon on Fri, 07/25/2008 - 1:28pm.

Thanks for the research and excellent presentation of a potentially confounding subject. Keep up the good work!

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By independentminded (not verifie... on Fri, 07/25/2008 - 3:23pm.

In this case, it sounds as if greed overtook some people and they either ended up getting in over their heads or allowed themselves to be scammed by people who were clearly out to make some quick money. The business of buying more than one unit is, in itself, an act of greed, imo. If they've got that much dough floating around that they buy multiple units, and then end up getting screwed in the process, then they don't deserve much sympathy, imho. This is something that happened freqently back in the 1980's, when the greed of many people got them in over their heads and into a mess.

Many people may believe that people like that are the majority of the people who end up losing, or almost losing their homes to foreclosure, but they're really just the tip of the iceberg. From what I understand, read/heard, the vast majority of people who've ended up on foreclosure lately are ordinary run of the mill working people who, for years, worked two low-paying jobs to pay the mortgage, and put a roof over the heads of them and/or their families, to feed and to clothe them and their kids, and health insurance to boot, who end up getting laid off, and end up losing everything, including health benefits, etc.,. and, in many cases, their house.

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By anon on Sat, 07/26/2008 - 8:14am.

Thanks Miki!

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By merlinmurph on Tue, 07/29/2008 - 8:40am.

From what I understand, read/heard, the vast majority of people who've ended up on foreclosure lately are ordinary run of the mill working people who, for years, worked two low-paying jobs to pay the mortgage...

My very informal, very unscientific survey disagrees with yours. If I were to take all the stories I've read, 90% of the foreclosures have been the result of some amount of greed. People were feeling good about their house appreciating, they took out a 2nd mortgage for the cash, and that put them on the edge. Or, they re-fi'd with a variable rate, then the rates went up, and they couldn't afford it. All user error where they were financed to the hilt.
Yes, there are a few cases with mortgage scammers and people simply hitting hard luck. The hard luck cases would have foreclosed regardless.

Again, there have been very few cases I've read about in the Globe, Time, Newsweek, WSJ, etc. where the foreclosee was not at fault.

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