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StumblePublished Friday, April 17, 2009 | 5:10 p.m.
Updated Monday, April 20, 2009 | 11:23 a.m.
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Hard Money and Hard Times
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Hard Money and Hard ...
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diggHard money brokers provide quick, no-fuss financing at double-digit interest rates to developers who can't get or don't want to get loans from banks. In good times borrowers make their payments and investors collect high-yield returns. In bad times borrowers default and lenders get left with property that may sell for a fraction of the previously appraised valued.
So is it the bad economy or bad practices that have some investors suing Jeff Guinn, the owner of Aspen Financial and son of former Governor Kenny Guinn? Tonight on Face to Face hear allegations that Jeff Guinn pocketed extension fees intended for investors and diverted millions to himself and colleagues without investors' knowledge.
Seasoned real estate expert Donna Ruthe estimates her Aspen portfolio losses in the millions. Ruthe and her husband, former Boyd Group executive Chuck Ruthe, are spending a fortune to sue. But I also spoke with a widow who lost her husband three years ago. She declined to go on camera but says she invested her husband's life insurance proceeds with Aspen in what are now non-performing loans. Her 18- and 22- year old sons have been forced to drop out of college. An expensive lawsuit seems out of the question.
Guinn and his attorneys declined to appear on the program but sent a statement saying that Aspen denies any allegations that cast it in a bad light and that the company looks forward to defending itself and its principals at the appropriate time. The lawsuit is posted to the right.
SURPRISE SURPRISE
I'm glad to see someone had the financial ability to go after this problem. I have lost a great deal of money too and am on several of the loans mentioned in the lawsuit. It was interesting to see that Todd Strattan was Jeff's partner. I lost $50,000 on that deal. I think we should all get together as trust deed holders on this and see what we can do as a large group.
I'm not surprised by the lawsuit. Why can't people that invest get the documents that belong to them. Why can't people that invest get breakdowns of what they are being billed for. Why does the son of the ex-gov think that he has special privileges and is above others! I hope he and his partners get what's coming to them. What is surprising is that he filed a lawsuit against Community Bank. Boy we should feel sorry for people that owe a bank $40M+ for their 2nd homes on the beach, airplanes, diamonds and jetsetter lifestyles. Give me a break. What was the trade off at Community bank and Aspen. Where there any non-performing loans at Community that were going to be placed on more innocent Lenders? These are some of the questions I have.
Does anyone out there want to get together and see if we can do something about these defaulted loans? I am a lender in second position and have lost everything. I believe if we worked with the first position people we could retain the land and wait for the market to come back in a few years. The land isn't going anywhere! It will be valuable again and we could sell it and all get "something" instead of "nothing". Please feel free to contact me if you are interested. sara_mac25@hotmail.com
I am in the first position on two loans. Over 100k total. I have felt for the longest time that there was not full disclosure regarding this investment. My rep at Aspen says that we must all hang in together and hope for better times. One loan has foreclosed the other is paying only half of the original interest rate. I had no idea these lenders could continue to extend and extend until god knows what happens. If I knew I would be tied to an investment for as long as the borrower wanted and other investors can vote to take a hair cut and I would have to go along with their vote I would have never invested in anything like this.
The first position with less of a rate must take priority, the people who are involved in second trust deeds, sorry, I accepted less of a rate on the first position for a reason and it wasn't so I can protect Jeff Guinn and his relatives who are also in second trust deeds. I have been wondering for awhile how to handle this. I even spoke with an attorney. I am cosidering joining a class action against Aspen. My representative at Aspen is in second trust deeds, Guinn is in seconds, his friends are in seconds, and so far it is the people in the first position getting hosed. It's on!!!! Let's talk. vegastitan21@yahoo.com
In reply to vegastitan21; Jeff Guinn seems to be invested all over these loans. He is 1st, and 2nd position as well as being a partner with some developers which would be an apparant conflict of interest. We are bound by the loan servicing agreements. The Mortgage Lending Division is virtually powerless. Individual lawsuits are not cost effective. We are in second position and have virtually lost over $500K. Jeff Guinn may be trying to protect himself and a small circle of friends, but I can assure you that WE are not his friends. Whether in 1st or 2nd position it seems that none of us are being represented fairly and stand to lose our total investments unless we can join together. Together we could have a strong enough voice to bring about state intervention on our behalf. The state may be able to take over the handling of these properties until property values come back in a few years and we can all receive a fair portion of our overall principal investment. In essence, united we have a chance, divided we stand no chance.
sara_mac25@hotmail.com
seems like alot of us lost investments during the resession. my 401k is down 43 percent alone and many have lost their homes. and here we have a wealthy invester who rolled the dice on a lucritive venture fully knowing the risks and now wants to go to court...ok, well and good. thats her right but, its not a newspaper's or a reporter's job to allow her to have a podium from which to shout it from. this paper is not just reporting the news here. i wonder what motivations are at work.
In response to loanvictim's comment Donna Ruthe was not in the dark about her investments. I'm sure any documents she's wanted were hers for the taking. She was intimately involved with aspen mortgage, personally as well as professionally. Like a jilted lover, she is firing back at an employer that dumped her. the only reason she's filing the lawsuit is to get mo money. That seems to be her motive for having friends, family, or ties to this community.