House of the rising Moonglum

Via the broken heart, I see that Chicago area slumlord, Kakvand just got 9 years in prison for being the ringleader in “a mortgage scheme that resulted in abandoned, crime-ridden Chicago apartment buildings”. Well that explains a lot. I wonder how many other greedy people like him are out there, ruining people’s dreams. I find it interesting that there are two elements to this story.

The first of course is that it does immediate damage to the neighborhood. When a bunch of supposedly rehabbed condos go up, maybe the ones next door do the same thing, but instead of a condo for a neighbor, you get an empty shell of a building which crime spills out of. Consider:

Kakvand bought 33 apartment buildings in Rogers Park and on Chicago’s South Side between 1997 and 2004, but didn’t renovate them. Units were sold as rehabbed condos at inflated prices, using straw buyers who defaulted on $29 million in loans. The plot displaced renters, and left decaying buildings prone to squatters, drug dealers, fire and water damage.

Which leads me to the second part of this that I find interesting. One man single handedly caused $29 million in real estate loans to go south?! That certainly can’t have helped the mortgage market! But it is an interesting insight into the system, because for that to work (and, well, the less illegal scams that have been put over on unsuspecting home buyers for the past few years) you also need help. “Also charged were Syed Ali Mohammed Razvi, a fugitive, and real estate appraisers Thomas M. Groh, Eric L. Dorsey and Britt J. Pierre, who earlier pled guilty.” Wow. Fugitive real estate appraisers. “Haggerty said Kakvand’s continuing legacy is the reduction in the amount of affordable rental housing in Rogers Park, and the artificial inflation of area home prices.” And here I just thought is was condo conversions. Who knew it was also fake condo conversions. What a world.