Two to pay thousands in realty case

Spokesman Review (Spokane), Jun 27, 2000 by Bert Caldwell Staff Writer

 

 

The individuals who provided the money behind a real estate investment deal have settled a lawsuit brought against them by the state of Washington.

 

Glen Ekstrom and Dr. Julian Bindler paid $166,000 in restitution and $103,399 in attorney fees and costs without admitting guilt to any allegations brought against them in 1997 and 1998 under the state Equity Skimming and Consumer Protection acts.

 

Ekstrom and Bindler were general partners of Inland Acceptance LP, a limited partnership that funded loans made to No Money Down Homes Inc.

 

No Money Down Homes bought and remodeled homes for profit.

 

The owner, Tony Napier, would buy homes using short-term financing from the sellers. He would then take out a larger loan from another source, usually Inland Acceptance. Interest rates ran as high as 45 percent per year.

 

In one case cited in the 1998 complaint, one home sold to Napier for $99,950 ended up with $129,000 in encumbrances.

 

When No Money Down Homes defaulted, the former owners were notified of the foreclosure but were unable to pay the principal and interest due.

 

Napier pocketed the loan proceeds and Bindler, through Inland, got the property.

 

The settlement filed in Spokane County Superior Court last week covers five such incidents, all of which occurred in 1995.

 

The restitution represents about half the equity victims lost in the scheme, said Washington Assistant Attorney General Owen Clarke Jr.

 

All lost their homes, he said.

 

Napier pleaded guilty in June 1998 to first-and third-degree theft and engaging in a pattern of equity skimming.

 

Roger Reed, who represented Bindler, said Clarke's office pushed the boundaries of Washington law in pursuing his client and Ekstrom.

 

There are no statutory limits on interest rates for commercial or hard-money loans, he said. Hard-money loans are made on the basis of collateral, not credit rating.

 

No Money Down Homes, as a contractor, was a business.

 

"Everyone understood they were commercial loans," Reed said.

 

But he and Bindler, who put up all but a fraction of the money for the settlement, decided that accepting the terms would be cheaper than protracted litigation with no certainty of the results, Reed said.

 

Copyright 2000 Cowles Publishing Company

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