Santorum's Shady Mortgage Deals In Property Bought With NVR Official

A small PA paper is the only one that has deigned it newsworthy to look into Rick Santorums virtually open-for-all-to-see mortgage deals (as opposed to him getting "glitter-bombed").

As the article details, the sordid tale begins in 2007, when Santorum formed a trust with mortgage and development company NVR's secretary and general counsel James Sack, which then bought a property in Great Falls, Virginia for $2M. It isn't clear (and probably isn't ever going to be public) who exactly put in what capital for that purchase, but I'm going to guess NVRSack put up most or all of it (I wonder why).

Then, over the next couple years, as the property's value fell, it was used by Santorum as essentially a personal piggy bank with up to $2.5M in mortgages taken out on it at a time, from banks including American Home Bank of Lancaster, PA and behemoth ING.

The property was actually transferred from the trust to Santorum in June, 2009 (at that time, as far as we can piece together, the property had $1.5M in mortgages on a $2M sale price, or $500k of equity. How nice of NVR--er, we mean Sack).

We looked at the timeline and pieced together the following interesting milestones:

• Feb. 2010 - The Santorums take out another $1M loan on the property, making about $2.5M total outstanding, on a property that sold for $2M. They are at least $500k in the hole at this point.
• March, 2010 - The Santorums pay back the $1.5M loan, making $1M outstanding -- but now the property appraises at only $1.4M (thus, they were really more like $1M-$1.1M in the hole above, yet somehow got a $1M loan).
• July, 2010 - The Santorums are able to take out another $1M loan, for about $2M total outstanding. But now the property appraises for only $1.2M, so they are $800k underwater.

Keep in mind this is all going on as underwriting standards are as strict as ever. How did he get an additional $1M loan that put the underlying property $800k in the hole? We have to wonder how many more loans Santorum can take out of this already-underwater property, which he was "gifted" from a trust formed with someone from a major developer and mortgage company.

All of this is to say nothing of Santorum's questionable residency and other property/mortgage deals, which the Charter's Valley Patch briefs.