Yesterday Doomer G found a hot new investigative series at the Fort Worth Star-Telegram. If I understand reporter Danny Robbins [1] [2] and video journalist M.L. Gray [3] correctly, things may get even uglier on the way down the house price curve than they were going up. Here’s where the rubber hits the road:

"For the better part of six years, the vast majority of the property foreclosed in the Dallas-Fort Worth area by Genesis [a property tax lender according to the story] and sold by Frossard has been acquired by Kidwill or one of his companies.

The sales have resulted in $13 million in such property winding up in Kidwill’s hands at less than 10 cents on the dollar.

Frossard and Kidwill say there’s nothing unusual or improper about the sales.

But others say at least some have not been fairly bid, giving voice to larger questions about the foreclosure process, a little-known corner of the lending industry and the state’s oversight." [1], my emphasis

Robbins makes this very tangled tale almost comprehensible. I’m sure we’ll hear a lot more stories like this in the future. On the old investor’s principle that ‘you never find just one cockroach,’ this looks like a great time for increased vigilance around "tax lending" and the auction process in all of America’s hot new foreclosure markets. Many thanks to G, and to the cross-metro rivals of Steve Brown’s Dallas Morning News for busting this story open.

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Notes and References

[1]: "Property auctions abused, critics contend", by Danny Robbins, Fort Worth Star-Telegram, April 15, 2007.

[2]: "Anatomy of a deal", by Danny Robbins, Fort Worth Star-Telegram, April 15, 2007.

[3]: "Going Once … Going Twice …", Video produced by M.L. Gray, Fort Worth Star-Telegram, April 15, 2007.

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