Santorum & the Creamcup Trust- Rick's shady real estate dealings to buy family home

[PA Democrat]

During Rick Santorum's 2006 Senate reelection campaign, the press reported on a $500,000 preferential mortgage that Rick Santorum received from a large campaign contributor. The Santorums would not have qualified for the mortgage on their Leesburg, Virginia home under the company's guidelines, but apparently exceptions are made for corrupt politicians.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2123328

This scandal was just one of many that led to Santorum's Senatorial reelection defeat.

Fast forward to August, 2007 when the Santorums sold their Leesburg, Virginia home and moved to Great Falls, Virginia. Here is where the story gets very interesting.

According to real estate records, the Santorums formed a trust with James Sack who was the secretary and general counsel of NVR, a large homebuilding and mortgage banking company. Info on NVR here: http://www.nvrinc.com/About.aspx

The trust, named the Creamcup Trust, purchased the Great Falls home for $2 million. A mortgage in the amount of $1.5 million was secured by the trust through the American Home Bank in Lancaster, PA. There are no records to indicate who put up the $500,000 down payment. At the same time, Rick and Karen Santorum also secured a second mortgage in their own names in the amount of $200,000. The family moved into the home owned by the Creamcup Trust. At this point the property is mortgaged for 85% of its value, above the 75% industry guidelines.

The story gets more and more convoluted as the deed to the home is transferred and the Santorums pay off and take out a series of new mortgages. At times the house is mortgaged for much more than its appraised value. A timeline of activities:

Aug 2008- Santorums pay off the $200,000 second mortgage.

Jun 2009- The Creamcup Trust transfers the property to Rick and Karen Santorum (they are now the sole owners).

Feb 2010- Santorums take out an additional $999,950 mortgage on the home (on top of $1.5 million original mortgage).

Mar 2010- Santorums pay off the $1.5 million original mortgage issued to Creamcup Trust.

Jul 2010- Santorums secure a $1 million mortgage from Ing Bank in Minnesota (at this point the house is reassessed at $1.4 million)

Oct 2010- Santorums repay the $999,950 mortgage (the house is now worth only $1.2 million).

It also looks as though the Santorums managed to get some great interest rates on these deals despite the fact that at numerous times they were heavily mortgaged and even underwater.

The story leads one to question what the deal was with James Sack, the NVR official, that would entice him to help the Santorums buy their home. Who put up the downpayment? How did the Santorum manage to take out additional mortgages on an already heavily mortgaged home? Why were they permitted to acquire a new mortgage and delay paying off other mortgages?

There is more detail at:

http://mclean.patch.com/articles/santorum-6ee3fd3b
http://ml-implode.com/viewnews/2012-01-28_SantorumsShadyMortgageDealsInPropertyBoughtWithNVROfficial.html

[alcibiades_mystery]

1. Everyone in PA knew about this kind of stuff...Santorum lost badly to Casey in part because

he was corrupt as the day is long, and everybody knew it. His real estate dealings just begin to scratch the surface. Dude is dirty.

[HopeHoops]

7. He still owes Penn Hills over $100,000 for "cybertuition" AND...

he never spent a single night in the shack he claimed to be his "primary" residence.

[PA Democrat]

9. Wasn't he renting the house to his niece and her husband?

I think Santorum claimed that the niece and husband left when he needed to use the house.

[HopeHoops]

10. Everyone in the neighborhood claims that he never spent a night there - and yes, rented it.

They weren't there for long.

[Enrique]

2. Creamcupgate

[yellowcanine]

3. Santorum formed a trust with Sack called the Creamcup Trust?

The jokes write themselves with Rick Santorum.

[tanyev]

4. And you do not want to know what those creamcups are filled with.

[PA Democrat]

5. The trust was named after the address of the property.

Apparently, Santorum resides at Creamcup Lane.

[yardwork]

6. The Creamcup Trust? You can't make this stuff up.

[yellowcanine]

8. Santorum + Sack = Creamcup

[ellenfl]

11. i think i also read that he was sending his kids to schools outside his school district

by claiming that property he did not live in was his homestead.

ellen fl

[starroute]

12. Not just outside his district -- outside the state

That particular scandal is referred to further upthread. Santorum was living in Virginia while representing Pennsylvania as a Senator -- and claiming Pennsylvania residency on the basis of a house he owned but rented out and never lived in himself. At the same time, he was getting the Pennsylvania school district to pay for his kids' cyberschooling at a cost of over $100,000.

There's a lot of old dirt on Santorum just waiting to be resurrected.

[ellenfl]

15. i hope that story IS among those resurrected as much as i hope santorum is the nominee. eom

[exboyfil]

16. I am not going to defend the housing stuff

but as far as the schooling.

I frankly think we should pay our representatives enough to maintain two homes. $175k is not enough to maintain two fully equipped homes. I want Congress to have their families with them. I also want regular people who are not rich serving in Congress. I assume Rick Santorum was a long time tax payer of the state of Pennsylvania. It appears Virtual Schools are a benefit afforded to residents of Pennsylvania. He took advantage of a benefit that he was entitled to while in Congress. He must maintain his residency in Pennsylvania, but at the same time it is beneficial to have his family with him. Members of Congress should be given this consideration.

The residency designation should have ended after he left Congress though. At that point he must decide whether he is a resident of Virginia or Pennsylvania. That means the state in which he spends the most nights is his residency.

[starroute]

17. I don't think your assumptions add up

For one thing, if members of Congress are going to have their families living near Washington, why do they need a second "fully equipped" home back in their home state? And for that matter, if they move their families out of state, what roots do they still have in the districts they're supposedly representing?

For another thing, we've recently seen statistics on how wealthy most members of Congress are and how that puts them out of touch with the ordinary problems and concerns of their constituents. Even their base salary of $175,000 already puts them in the top 1%. So why should we pay them even more to live like the top 0.1%, with multiple houses (and a Cadillac in every one)?

And finally, when it comes to Santorum, what he did was essentially a scam. He could have easily sent his children to Virginia public schools, but instead he extracted money from a not-too-flush Pennsylvania school district to support the home schooling of children who would not have been attending those Pennsylvania schools in any case. Moreover, he did it by claiming residence in a house where he never actually lived. That was just wrong -- and the Pennsylvania voters who turned him out of office by a lopsided margin knew it.

[blue neen]

13. Hmm. This is quite an interesting story.

Shady Santorum certainly belies his choir boy image, doesn't he?

[gratuitous]

14. But you know how this will play

"Ancient history." "Nothing untoward happened." "You're persecuting poor Rick Santorum!" "It's an assault on religious liberty!"

And the popular media will simply parrot whatever they're told. None of the talking chuckleheads will so much as raise an eyebrow, and the low-information folks will decide it's just a bunch of political mud-slinging.

On the other hand, who might make a stink about this? I don't think Romney's anxious to get into a fight over personal residences, as far too many skeletons would come clattering out of his closet. McCain didn't fare too well in 2008, especially when he couldn't even remember how many residences he owned. Maybe Ron Paul will say something about it, but the media pretty much ignore him (and rightly so, for the most part).