A mortgage originator is accused by Minnesota authorities of recruiting straw buyers in a "builder bailout" scheme involving the purchase of about 220 new homes at "substantially above" market value in the state’s fast-growing areas including St. Cloud, Eagan, Rochester and Otsego.
The Minnesota Department of Commerce has revoked the mortgage originator license of Michael Prieskorn and fined him $2.2 million for his involvement in the alleged scheme, which allowed his company, Maine Estates, to collect "management fees" ranging from $22,000 to $105,000, authorities said.
Officials said they have been unable to locate Prieskorn, and that he failed to appear at a Dec. 17 administrative hearing. Prieskorn allegedly emptied his bank accounts in April 2007, and stopped making payments on the homes, most of which have fallen into foreclosure.
The Department of Commerce said it has taken action against four other real estate professionals accused of working with Prieskorn.
The department revoked the real estate salesperson license of Michael Robert Bohn in July, and permanently barred him from originating mortgages in Minnesota.
In November, the department retroactively revoked the mortgage originator license of Vista Mortgage and permanently barred owner Kim David Norling from engaging in residential mortgage originating or servicing. The department also revoked Norling’s real estate salesperson license.
In June, the department revoked the real estate salesperson license of Peter Douglas Lyle and permanently barred him from engaging in residential mortgage originating or servicing.
In May, the department retroactively revoked the mortgage originator license of Expert Mortgage and permanently barred owner Guy Abernathy from engaging in residential mortgage originating or servicing.
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