As shoddy lending deals unravel, New Frontier Bank is a common thread | SkyHiNews.com

As shoddy lending deals unravel, New Frontier Bank is a common thread

Miles Moffeit
The Denver Post
Grand County, CO Colorado

The pitch was made to a group of San Francisco immigrants packed into a windowless Holiday Inn room over plates of cold chicken and glossy photos of Colorado vistas.

Three years ago, Edwin Resplandor was tantalized by the deal: Put down merely $2,500 and he’d wind up owning an investment home – its construction and mortgage neatly packaged into one loan handled by American Dream Seminars of Denver.

Months later, however, ADS withdrew more than a half-million from his loan account and abandoned the project without driving a nail, he claims in a lawsuit joined by seven other investors, leaving him holding a half-million-dollar debt and only empty land.

“Now we’re in limbo – we’re just trying to survive,” said Resplandor, a 43-year-old Filipino transit driver in San Francisco now working two other jobs to support his wife and 2-year-old daughter.

The scheme, alleged to have hooked hundreds of others across the country into buying properties, had a common thread: The now-shuttered New Frontier Bank of Greeley kept the money flowing for the deals, providing millions in loans to ADS without closely examining the transactions or requiring collateral to lessen the risk to the bank and investors, say attorneys and real-estate experts.

The claims provide a new glimpse into the hazardous lending practices that led to one of the costliest bank failures in the country this year.

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While government records have shown the bank recklessly oversaw agriculture and real-estate loans, lawsuits filed in Grand, El Paso, Adams and Weld counties on behalf of dozens of ADS investors suggest the bank enabled a sprawling fraud scheme through negligence and breach of fiduciary duties.

To read the rest of this story, go to:

http://www.denverpost.com/business/ci_13786517

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