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Real estate bubble still popping

Jeffrey Lubin, who said investors could get 17 percent a year, files for bankruptcy

Jeffrey Lubin
Jeffrey Lubin

Once high-flying hard-money lender Jeffrey Lubin has filed for Chapter 7 liquidation bankruptcy. His wife Barbara joined in the filing. Her given address was on Hidden Valley Road in La Jolla, in a home worth $4 million, according to the bankruptcy filing; his stated place of residence appeard to be an office building in Mira Mesa.

The couple lists assets of $4.3 million and liabilities of $19.9 million. They say they have a combined monthly income of $19,604.85 and combined expenses of $32,454.68. That leaves a monthly net loss of almost $13,000. The $4 million La Jolla home has extensive liens against it, including sizable ones from the Internal Revenue Service and Franchise Tax Board.

Before the real estate collapse of 2007–2008, Jeffrey Lubin was riding high. Like other hard-money lenders, he was charging unusually high rates to borrowers and paying high rates — 10 to 17 percent a year — to investors. He was loaning the investors' money to developers in California, Arizona, Nevada, and other places, and keeping a profit for himself.

His company had a name that is almost sacred in San Diego: Scripps Investment & Loans.

"Investors in Bernie Madoff made out way better than Scripps investors," said one of Lubin's customers.

The bankruptcy filing says that he has raked in $60,000 in income thus far this year and took in $150,000 in each of the two previous years.

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Jeffrey Lubin
Jeffrey Lubin

Once high-flying hard-money lender Jeffrey Lubin has filed for Chapter 7 liquidation bankruptcy. His wife Barbara joined in the filing. Her given address was on Hidden Valley Road in La Jolla, in a home worth $4 million, according to the bankruptcy filing; his stated place of residence appeard to be an office building in Mira Mesa.

The couple lists assets of $4.3 million and liabilities of $19.9 million. They say they have a combined monthly income of $19,604.85 and combined expenses of $32,454.68. That leaves a monthly net loss of almost $13,000. The $4 million La Jolla home has extensive liens against it, including sizable ones from the Internal Revenue Service and Franchise Tax Board.

Before the real estate collapse of 2007–2008, Jeffrey Lubin was riding high. Like other hard-money lenders, he was charging unusually high rates to borrowers and paying high rates — 10 to 17 percent a year — to investors. He was loaning the investors' money to developers in California, Arizona, Nevada, and other places, and keeping a profit for himself.

His company had a name that is almost sacred in San Diego: Scripps Investment & Loans.

"Investors in Bernie Madoff made out way better than Scripps investors," said one of Lubin's customers.

The bankruptcy filing says that he has raked in $60,000 in income thus far this year and took in $150,000 in each of the two previous years.

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Comments
7

The party is over for this affinity fraud.

July 4, 2016

Ponzi: The party was over some time ago. Best, Don Bauder

July 4, 2016

I wonder if a criminal investigation is lurking in the grand jury.

July 4, 2016

Ponzi: I am not aware of any criminal investigation but I have thought for some time that one was justified. Best, Don Bauder

July 6, 2016

Mike Murphy: The median home price in the county is right around $500,000. But the San Diego metro area has a big problem. Median income is moderately above the nation's, but the cost of living, particularly housing, is far, far above the nation's. Buying a house requires a lot of debt in San Diego County. This is a worry. Best, Don Bauder

July 4, 2016

Many houses in my area were "flipped" and sold within a few days of being on the market. The houses are small 2/bd/1ba houses w/1 car garage and sold for the high $400k's. Now the new crop of flips are sitting on the market with the price around $515k. The area was built for middle class workers (circa 1950) and were starter homes. The middle class that bought these homes in the 50's through the 90's can not afford these homes now as the jobs that funded middle class home ownership no longer pay enough to buy any home. San Diego, as you know, has had many real estate boom and busts and I think we are headed for another bust.

July 5, 2016

AlexClarke: Both the stock market and housing market have been pushed up by the amount of money and credit created by the Federal Reserve. At some point, prices in each will get so high that prices will reverse and back down. A crash like late 2007- early 2009 does not seem likely at this point, but I could really be wrong on that.

It is sobering that middle income homes built in the 1950s are now too expensive for people in the middle class. Best, Don Bauder

July 5, 2016

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