She was 22 and tired of exotic dancing for a living. So Irene Thomas bet her future on real estate, hoping that becoming a landlord would be her first step toward exiting the stage. With the help of Universal Mortgage Inc., a brokerage company in Brooklyn Park, Thomas signed the papers to buy a house early last year. And she kept signing. And signing. And signing. In 90 days, with no money down, she had $2.4 million in debt and 10 houses in her name, most of them in north Minneapolis. Nine of the houses were sold to her by employees of Universal, the same company that found Thomas the loans to pay for them. Less than a year and a half later, Thomas was losing all 10 properties as mortgage lenders moved to foreclose on them. Her credit ruined, Thomas now believes she was duped by a group of real estate insiders who sold houses at inflated prices in deals that relied on falsified documents and unsophisticated buyers like herself.
Foreclosures are creeping up in Minnesota and around the country. In Hennepin County alone, foreclosure sales so far this year are up 62 percent to 1,042, compared to the same period last year.