Dream Home Program Turns Into a Nightmare
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If it sounds too good to be true…
Those are words that folks who invested in Metropolitan Grapevine’s Metro Dream Home mortgage payment scheme will hear their sleep. An intricate plan to where the homeowner paid for their home and invested in Grapevine’s program with the understanding that the lending company would pay their mortgage payments.
What investigators are now calling a Ponzi scheme has now collapsed and the homeowners are out their investment and are stuck with homes that they bought at an inflated price and many are facing foreclosure.
The Maryland securities commissioner shut down Grapevine’s operations last year, put the company into receivership and liquidated its assets. A Maryland court found that more than 1,000 people had invested about $50 million in Grapevine programs, which promised to pay home and auto loans on their behalf. At its end, Grapevine had debts as high as $200 million to $300 million and assets of just $2 million, according to state documents.
Grapevine’s plan, hatched during the real estate boom, when prices did nothing but rise, set its participants up for foreclosure. It was an invitation-only network spread among family and friends. All they needed was a good credit rating and a lack of healthy skepticism.
They worked with participating real estate agents to buy their “dream homes” at inflated prices but with no down payments. Ten to 15 percent of the home’s sale price would go straight into Grapevine’s coffers, along with other lump-sum investments. It was supposed to have been invested. With the returns, Grapevine promised to make their mortgage payments (and some participants’ car payments) and retire the debts in just a few years. via washingtonpost.com.
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