Pledging Property Not Owned Draws Attention to Little Rock Borrower

by Arkansas Business staff  on Monday, Mar. 7, 2005 12:00 am  

A Little Rock businessman is drawing scrutiny for using property as collateral to borrow money.

What's the big deal?

In at least three instances, he didn't own the property used to secure the loans.

He sold two of the mortgaged properties in question and refinanced the bank loans backed with the property he no longer owned.

One of those deals made it through undetected, with the lender ultimately repaid and none the wiser.

However, the second one did attract attention. That led to a lawsuit and a scramble that paid off the troubled loan and made the awkward litigation go away.

Nonetheless, we're told the situation and allegations of loan fraud led to a criminal referral, a matter now under investigation.

We understand a third piece of real estate he no longer owns is pledged as collateral on yet another loan. This one involves a non-banking real estate loan.

Is this all a big misunderstanding?

It will be interesting to hear the explanation. Financial dominoes appear to be falling.



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