SACRAMENTO, CA - A local real estate investor will sign over the deeds to a pair of residential properties to anyone willing to take them.
"I'm stuck with them and I don't want them," said Marie Gastelum, who was convinced by a friend of a friend to use her good credit to buy three homes in Chicago in 2006 and 2007.
The California state employee said the man overstated her five-figure income on loan applications, allowing her to get more than $1 million in mortgages with no money down.
News10 attempted to contact the man, who appeared to be last doing business in Atlanta until the state of Georgia ordered him to stop working in the mortgage industry without a license.
The rent payments that were promised to cover the mortgages stopped coming after about three months, Gastelum said, and she was forced to declare bankruptcy under mounting debt.
The lenders were granted permission by the bankruptcy court in Sacramento to begin foreclosure proceedings in 2007 and 2008, but only one of them actually followed through and took the house at 5361 S. Princeton Avenue in April 2008.
Cook County public records show Fifth Third Bank and Select Portfolio Servicing in late 2009 formally released their interest in the two remaining homes at 1517 W. 61st Street and 356 W. 45th Street.
The trouble, Gastelum said, is that by the time she learned she still owned the two houses, they'd fallen into such disrepair that one of them had to be demolished.
Sacramento bankruptcy attorney Peter Macaluso said a real estate expert in Chicago told him the combined value of the two properties is $11,000, while Gastelum has racked up more than $127,000 in city liens and court judgments because her name remains on the deeds.
Neither lender offered an explanation of why they chose not to foreclose on $655,000 worth of loans.
"We don't comment on customer accounts," said Fifth Third Bank spokeswoman Barbara Grimsley.
Macaluso believes they chose to cut their losses because a Chicago city ordinance holds lenders responsible for securing and maintaining bank-owned property.
Macaluso has been granted permission to reopen Gastelum's Chapter 13 bankruptcy case that was initially closed in 2011 because the liens and judgments continue piling up.
"This is not exactly the fresh started we anticipated," he said.
Because of the mess in Chicago, Gastelum also lost her primary residence in Fair Oaks.
"Emotionally and financially, it's been tough," she said, choking back tears.
Macaluso said he's contacted Chicago city officials and non-profits to see if anyone will accept a gift of the two properties.
So far, there are no takers.
By George Warren, GWarren@news10.net