A former Minnesota resident is under federal investigation for allegedly leaving house buyers saddled with properties and mortgages they never intended to hold. It allegedly went like this: Blackstone Sales LLC promised people a quick check for $5000 if they’d sign some papers and act as a strawman for buying a house and obtaining a mortgage. The idea was that Blackstone would flip the property quickly, and the buyer would walk away with a check.
What apparently happened, according to an article in the Pioneer Press, was that Blackstone walked away, and the buyers found themselves with their quick check, but on the hook for the property and mortgage that was, by then, possibly in default. Meanwhile, Blackstone could make a “management fee” of as high as $70,000 out of each mortgage.
Posted on June 16, 2008