Metro Dream Homes -- Ponzi scheme?

[javasaurus]

There is a highly suspect housing market scheme going on in Maryland, primarily in PG County, called "Metro Dream Homes" -- it reads like a pyramid scheme (also called a Ponzi scheme). You "buy" a house, paying perhaps $75000 more than asking price, and the excess goes not to the seller, but to Metro Dream Homes. None of your money goes into the deal -- you've got a 100% mortgage. Metro Dream Homes claims they'll pay off your house in five to seven years, and then you sell the house and split the equity. You pay nothing! No mortgage payments, just free housing for several years, and a profit at the end.

There is some suspicion that new entrants into the scheme are actually paying the mortgages of early entrants, and that when the number of entrants decreases, the whole thing will collapse, leaving the final group of homebuyers completely and totally screwed.

It's difficult to find additional information because they are very hush-hush, and people in the scam have signed legal contracts to keep it hush-hush. However, there is a very nice recent article from the Washington Post to give you some details, at least: ARTICLE by the Washington Post

Comments

[blueeowyn.livejournal.com]

*shudder*

[blueeowyn.livejournal.com]

POS Dream Homes
Point of Screwage?
Piece of Shit (financing)
Parroting of Scalawag?
...

[wilhelmina-d.livejournal.com]

You always have the most interesting stuff on here. Thanks for sharing!

[javasaurus.livejournal.com]

Thanks! A coworker pointed me to that article, and it seemed important to share it.

[wilhelmina-d.livejournal.com]

Thought you'd find it interesting - my company just sent out an email saying that we are not to do loans with this company.

[javasaurus.livejournal.com]

Very cool. Hopefully other lending institutions will follow suit!