I knew it was coming and only a matter of time, but real estate investor Don Green has finally been indicted for fraud, money laundering and tax evasion.  Going down with him are loan officers and appraisers that helped him in the alleged scam.

In a nutshell, the allegations are that these guys would find people to put up their credit to buy properties at incredibly high prices.  The "seller" would agree to contributions back to the buyer for repairs that would never be completed.  The appraisers would jack up the values and the LO's would push the paper through. Hmmm, who was supposed to do the repairs?

Last summer Mr. Green also defaulted on about 326 properties that he owned through an LLC.  Most were in terrible condition.  Over 15 banks took a serious financial hit including a good number of smaller community banks in town.  I looked at buying portfolios from the lenders at an average price of $21,000 per property.  Loans averaged $45,000 per property.  Last year the offer was rejected.  Now, the banks are still stuck with a lot of them and can't get $21,000.

That many properties going on the market all at once, many on the same blocks where other defaults were occurring, literally decimated neighborhoods. 

Attached is a link to the Columbus Dispatch article on the topic. 

http://www.dispatch.com/live/content/local_news/stories/2007/08/23/flipped.ART_ART_08-23-07_A1_PK7MLGN.html?sid=101