Bsrsharma- You basically explained the scenario of my neighbor from Colorado Springs back in the 80s. Here is part of an article from 1990 on him.
Colorado developer Frank Aries had no intention of carving out another piece of ho-hum suburbia when, in 1985, he went calling on the Driggs boys, the freewheeling moneylenders at Phoenix’s Western Savings and Loan. Aries, who drove a Rolls-Royce, lived in a $1.6 million home in the ritzy Broadmoor district of Colorado Springs and liked to brag about the multimillion-dollar sailboat he had his eye on, was not a man who thought small. He envisioned 25,000 acres of homes, schools, industry, shops and golf courses surrounding the old Banning-Lewis Ranch east of Colorado Springs.
All Aries needed to pull off the deal was $240 million of somebody else’s money. The remarkable loan agreement he worked out with Western saw to it that he wasn’t personally responsible for a dime of the money.
In a segment on the national television news magazine “60 Minutes,” Frank Aries dispensed some important financial information: When borrowing money, never sign your name to the loan document. Aries used $235 million borrowed from Western Savings to buy the massive Banning-Lewis Ranch, got the city to annex it, then handed the land over to federal regulators in 1989 when his company missed a loan payment. Aries himself was not liable for the debt when his company could not make the payments. CBS promoted the segment with the teaser, “Do you know that you, the American taxpayer, own one-third of all the real estate in Colorado Springs? …” (April 20, 1991)
Not sure if I should be more pissed at him or the ones who loan the money. Same with todays scenario….Not happy about some of the brokers & lenders that “looked the other way” and the buyers who inflated their income/assets or knew they were way in over their head but took the approach that they can just hand the keys over if it didn’t work.
