When she’s not looking out for the little guy being taken advantageof by predatory lenders, Elizabeth Warren is making high-interest, short-term loans to family members and flipping homes for a profit. That’sthe revelation in a story published today by the Boston Herald,which identifies nine instances when Warren made a quick profit eitherbuying and reselling homes or loaning money to family members to fliphomes in the late 90s.
For instance, in 1993 Warren purchased a foreclosed home in OklahomaCity for $61,000. She resold the home 18 months later for $95,000. Inseveral more cases, Warren provided loans so that her brother could buyhomes and flip them. In 2000, she reportedly gave her brother a loan with9.5 percent interest so he could buy a home for $35,000. He sold thehome three months later for a 10 percent profit.
Flipping homes was a profitable investment for the Warren family,which made as much as 383 percent on a five-month transaction. Theaverage gain seems to have been closer to 40 percent. There was nothingillegal about the practice, but it was singled out by progressivesconnected to the Obama administration as one of the irresponsiblepractices that led directly to the financial crisis.
In late 2008, in the midst of the crisis, Rep. Rahm Emanuel took to the House floor and described the situation as a “man made disaster.”He placed blame at the feet of banks but also singled out people whowere “buying homes, they were being flipped as if they were pancakes.”He suggested people had a right to be angry about this behavior by banks and home flippers. Just a few months later, Emanuel would become Barack Obama’s Chief of Staff.
In most of the transactions, Warren wasn’t the buyer but simplyprovided loans to her brother, who then made the purchases and flippedthe homes. In essence, Warren was taking the role of a bank, makingshort- term loans to allow an experienced buyer to make a quick profit.She can certainly argue that all of this activity came a decade or morebefore the financial crisis hit in 2007-2008. However, there is someobvious hypocrisy in castigating the financial system which you and yourimmediate family have profited handsomely by emulating.
If nothing else, Warren has frequently posed in public as the champion of the little guybeing squeezed by powerful institutions and often forced intoforeclosure. It’s worth noting that she has also been the lender lookingto make money, even if the profit she’s making comes from buying andselling a foreclosed home.