Elizabeth Warren helped family flip wigwams for heap big wampum

Yes dear WizBang readers, it’s time to pick on Big Chief Paleface again.  The Boston Herald is reporting:

Elizabeth Warren, who has railed against predatory banks and heartless foreclosures, took part in about a dozen Oklahoma real estate deals that netted her and her family hefty profits through maneuvers such as “flipping” properties, records show.

A Herald review has found that the Democratic U.S. Senate candidate rapidly bought and sold homes herself, loaned money at high interest rates to relatives and purchased foreclosed properties at bargain prices.

Land records from Warren’s native Oklahoma City show the Harvard professor was active in the often topsy-turvy real estate market in the 1990s, including:

• Purchasing a foreclosed home at 2725 West Wilshire Boulevard from the U.S. Department of Housing and Urban Development for $61,000 in June 1993, then selling it in December 1994 for $95,000 — a 56 percent mark-up in just 18 months.

• Buying a house at 200 NW 16th St. for $30,000 in August 1993, then flipping it for $145,000 — a 383 percent gain after just five months.

• Lending one of her brothers money at 9.5 percent interest to buy a home at 1425 Classen Drive for $35,000 in August 2000. He sold the place three months later for $38,500 — a 10 percent gain in 75 days.

• Providing her brother with financing to buy a $25,000 house at 4301 NW 16th St. in 1994. He sold the property four years later for $42,000, a 68 percent increase.

… Herald columnist Howie Carr reported yesterday that Warren and her relatives also profited from two additional Oklahoma City foreclosures — in both cases showing triple-digit percentage gains.

Warren’s campaign issued a statement last night: “Elizabeth and (her husband) Bruce are fortunate to be in a position where they can help their family. They have been able to help relatives buy their homes and her nephew — a contractor — fix up houses.”

I’m not one to criticize someone for taking advantage of a good deal when they find it.  As a resident of Oklahoma City I can tell you that Warren and her family shrewdly bought bargain homes in parts of town that were popular transition areas (older/retired homeowners selling smaller 1950′s era homes to young first-time buyers) that saw a lot of market activity ten to twenty years ago.  And the house in Mesta Park (200 NW 16th), which is a neighborhood of stately two story WWI era homes that sell today in the $200 – $300k range, was an incredible find.  I’m also pretty certain that buying the house so cheaply meant it was in pretty bad shape, therefore a lot of the sales price went to cover the cost of renovation.

But there is something not quite right about an advocate for fair and affordable housing taking low-priced homes off the market and then reselling them at a substantially increased price.  This helps put thousands of dollars in Elizabeth Warren’s pocket, but it how does it help lower income first-time home buyers looking for an affordable property that they can buy, repair, and use as a means to invest and build equity wealth?  Likewise with foreclosure homes, which generally involve a significant financial loss for the foreclosed homeowner.  Should a critic of “predatory lending” and “dangerous mortgages” be profiting from the resale of foreclosure homes?

And look at the deal for 1425 Classen Drive.  It’s a two bedroom condo in a multi-unit townhouse style building.  The fact that the purchase and sales dates, and purchase and sales prices, of the property are so close together tells me that her brother was likely forced into a quick sale.  Probably the place was resold “as-is” or with little more than a new coat of paint.  If her brother enlisted the help of a licensed real estate agent, then he would have been responsible for paying their commission out of the sales proceeds.  If you factor in the 9.5% interest rate Warren charged her brother, it is very likely that he could have actually lost money on the deal.  But as a lender, Warren of course made money.

As I’ve said before, I have no doubt that Elizabeth Warren is genuinely concerned about the institutionalized or systemic disadvantages borne by America’s low income families.  But she has chosen to make her mark on the political world by attacking wealthy entrepreneurs and the financial industry.  That’s a rather tricky position for someone who has managed to earn a million-dollar fortune for herself, with much of it apparently derived from practices that she now preaches against on the campaign trail.

(Title shamelessly stolen from comments at The Blaze.com)

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Posted by Michael Laprarie on June 3, 2012.
Filed under Business, corruption, Elections, Finance Reform, Hypocrisy.
Tagged with: Elizabeth Warren • flipping • foreclosure • Real estate.


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