Larry Maxwell - Merchant of (Housing) Death

Post by the Hawthorne Hawkman, image from wcco.com

Earlier this week, I came across a rather interesting document from several years back.  Oddly enough, my knowledge of Larry Maxwell's mortgage fraud predates my employment with Hawthorne.  Here was this guy who was representing BOTH the buyer and seller (which, although rare, is very legal) and managing to sell his properties within two weeks or less, and for top market value or even higher.  Much of this was happening while the mortgage industry as a whole was slowing down.  Either Maxwell had figured out something that nobody else had, or there was some kind of fraud happening.

Based on his "maximum" sentence, we all know what the answer to that question was.  Since I knew I'd be starting up at Hawthorne, I called up a Realtor with whom I worked, and asked him to compile a list of Maxwell deals from the MLS for me.  He put together a list of every transaction Maxwell worked on in the 55411 and 55412 zip codes from 2005 through part of 2007.  Another researcher did some additional work with the data.  When I was doing a bit of housecleaning and came across this document, I thought I'd see what these properties are like now.

There were a total of fifty-nine transactions, and out of those fifty-nine...

...thirty-seven are confirmed as having gone through foreclosure.  I believe that number to be low, as there were several foreclosures I had independently confirmed but were not on the Hennepin County website.

Only three properties are still owned by the same owner as when Larry Maxwell was involved in the transaction. Those three are owned by a Zedrick Blake, and two of them are boarded/vacant.

Nine properties are currently homesteaded, although it is believed that at least several other properties are owner-occupied but owners have not properly filed homesteaded status.

The median time that these fifty-nine houses sat on the market was eight days.  Even during the height of the mortgage bubble, that's pretty impressive - okay, TOO impressive - for homes selling for top dollar in 55411 and 12.  Add to the mix that Maxwell acted as a dual representative (easier to commit fraud that way), and you realize there's virtually no way he could have sold scores of homes in eight days just off of his own personal and professional contacts.

Notable names come up as well:

The 1564 Hillside Ave N deal involving Keith Reitman, Jerry Moore, and identity theft has already been well-documented on Johnny Northside.

Donald Williams/Tyrone Williams (a straw buyer in Maxwell dealings) was involved in eight transactions. Another six are associated with a certain Howard Gangstead, a landlord many in NoMi are unfortunately familiar with, and one of THOSE properties is now owned by the infamous Wendy Sullivan (her LLC, Wenrich Properties, to be exact). All fourteen of those went into foreclosure at some point following the Maxwell transaction.

(It's important to note that my data isn't conclusive about whether the properties went directly into foreclosure from the person who bought houses through Maxwell, but the correlation is still strong enough to be noteworthy.)

1827 Oliver Ave N was owned by Willie McAfee and now by Mahmood Khan. It is unknown if the property was sold or transferred directly from McAfee to Khan.

917 Oliver Ave N was owned by Salem Inc, of New Salem Baptist church on 26th and Lyndale, and is now owned by Danmark Properties LLC. There is a history of assessments against this property.  Normally I would reserve judgment on how interconnected the McAfee's and New Salem were to Maxwell, except that Jerry McAfee testified as a character witness in Maxwell's defense and openly stated that they have a long history of working on housing issues together.

Even a cursory online search showed that at least twenty-nine of the fifty-nine properties currently had some state of boarded/vacant status, demolition, back taxes, significant assessments, rental licenses in review, or some combination of those factors.

The Jordan (15 transactions) and Willard-Hay (13) neighborhoods were the hardest-hit by the Larry Maxwell mortgage fraud hand grenade that he tossed into north Minneapolis.  Even though this is old information and Maxwell is in prison for a long time (let's make him live in a Dream Home when he gets out, if any are still standing), the information is still important for us as a community to consider.  The impact of financial crimes on our community is very real, and we can't let this happen again.