A den of real estate illegality? No, a hotbed

Here are some warning signs your mortgage guy wasn't entirely legal.

By JAMES LILEKS, Star Tribune

Last update: June 21, 2008 - 10:24 PM

According to FBI statements released last week, the metro area is a mortgage-fraud hotbed. That's the technical term: hotbed. This won't surprise anyone who's watched the real estate market in the last few years. You could scrawl a made-up Social Security number on a lawn gnome and roll him into some mortgage offices, and he'd get a loan. Are you the victim of hotbed-related mortgage fraud? Here are some warning signs your mortgage guy wasn't entirely legal:

• Accepted Monopoly money and gold-foil-covered chocolates at closing for the down payment.

• Would leave the closing every 10 minutes to wipe off the tanning beds in the next room.

• Used air quotes when asking if you had a "job."

• Let you use a stuffed animal to co-sign the loan.

• Gave you a loan below market interest rates based on nothing more than a phone call from the lender's CEO and concluded the closing by saying, "Nice to meet you, Senator."

• Asked if you would be interested in buying six other houses now, as long as we're here and we have the pens out and everything.

• Most telling sign your mortgage may not have been on the up and up: They lent you more money than you could ever pay back to buy a house you could not possibly afford.

Hah! Just kidding. That last one's perfectly legal.

jlileks@startribune.com • 612-673-7858 More daily at www.startribune.com/buzz.