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Radio and newspaper man and vultures

John Lynch in money troubles again

John Lynch
John Lynch

John Lynch, former chief executive officer of the Union-Tribune and previously a local radio executive, is in financial trouble again. He defaulted on his mortgage in December of 2016, and then woes cascaded in 2017 and this year. He has defaulted several other times in previous years, as the Reader has reported. 

Last year, T.A. Marsh Roofing slapped a mechanics lien on his posh Rancho Santa Fe home. The lien is still in effect. “We have had trouble collecting from him. He would not respond [to queries] until we put a lien on his property. He has paid some, but not what he owes,” says an executive of the company. Redfin says the house, not on the market, is worth $3.5 million.

In December of 2017, Lynch failed to pay the first installment on his property taxes. He is short $28,745.35, according to the last report of the county treasurer and tax collector.

Then this year, Lynch sold his mortgage to a Goldman Sachs subsidiary named MTGLQ Investors, according to assessor/recorder/county clerk records. MTGLQ buys nonperforming and severely delinquent loans and then grants principal reduction loan modifications on them.

MTGLQ , which could be called a “vulture fund,” has an interesting history. The prologue: Goldman Sachs was one major cause of the real estate derivatives crash precipitating the 2007–2009 Great Recession. Those crafty Wall Street rascals packaged toxic mortgages into bundles and sold them to clients as AAA-rated paper. But the firm, knowing there was garbage in those bundles, shorted them — or bet against the very bundles it had sold to customers as gilt-edged paper (nice folks there on Wall Street).

The government rescued Goldman and other big banks with massive infusions of funds. But in a settlement, Goldman was told it must help struggling homeowners; ergo, Goldman set up MTGLQ Investors to buy troubled mortgages. But Goldman is allegedly making money on this so-called magnanimous enterprise. It buys the troubled loans (many from the ailing Federal National Mortgage Association, or Fannie Mae) and then resells them when the borrowers resume monthly payments. If that can’t be done, Goldman forecloses and sells the homes, according to financial media.

The Reader previously reported that in 2010, American Express Centurion Bank sued Lynch for failing to pay $51,236 in outstanding credit card debt. In September, November, and December of 2012, the Reader reported that Lynch’s home on Clubhouse Drive in Rancho Santa Fe was in default. Each time, he had excuses: poor accounting by his advisers and the county treasurer, bad practices by a lender. “My net worth is quite substantial,” he told the Reader.

I put in a good-faith effort to hear his explanation for his recent financial woes. I called seven phone numbers believed to be his with no luck and sent two emails that came back. His phone number is not listed. I went to two persons who had communicated with him recently and they would not give out his phone number or email address.

“He always has a story — he is trying to get a deal done, or something like that,” says the T.A. Marsh executive. 

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John Lynch
John Lynch

John Lynch, former chief executive officer of the Union-Tribune and previously a local radio executive, is in financial trouble again. He defaulted on his mortgage in December of 2016, and then woes cascaded in 2017 and this year. He has defaulted several other times in previous years, as the Reader has reported. 

Last year, T.A. Marsh Roofing slapped a mechanics lien on his posh Rancho Santa Fe home. The lien is still in effect. “We have had trouble collecting from him. He would not respond [to queries] until we put a lien on his property. He has paid some, but not what he owes,” says an executive of the company. Redfin says the house, not on the market, is worth $3.5 million.

In December of 2017, Lynch failed to pay the first installment on his property taxes. He is short $28,745.35, according to the last report of the county treasurer and tax collector.

Then this year, Lynch sold his mortgage to a Goldman Sachs subsidiary named MTGLQ Investors, according to assessor/recorder/county clerk records. MTGLQ buys nonperforming and severely delinquent loans and then grants principal reduction loan modifications on them.

MTGLQ , which could be called a “vulture fund,” has an interesting history. The prologue: Goldman Sachs was one major cause of the real estate derivatives crash precipitating the 2007–2009 Great Recession. Those crafty Wall Street rascals packaged toxic mortgages into bundles and sold them to clients as AAA-rated paper. But the firm, knowing there was garbage in those bundles, shorted them — or bet against the very bundles it had sold to customers as gilt-edged paper (nice folks there on Wall Street).

The government rescued Goldman and other big banks with massive infusions of funds. But in a settlement, Goldman was told it must help struggling homeowners; ergo, Goldman set up MTGLQ Investors to buy troubled mortgages. But Goldman is allegedly making money on this so-called magnanimous enterprise. It buys the troubled loans (many from the ailing Federal National Mortgage Association, or Fannie Mae) and then resells them when the borrowers resume monthly payments. If that can’t be done, Goldman forecloses and sells the homes, according to financial media.

The Reader previously reported that in 2010, American Express Centurion Bank sued Lynch for failing to pay $51,236 in outstanding credit card debt. In September, November, and December of 2012, the Reader reported that Lynch’s home on Clubhouse Drive in Rancho Santa Fe was in default. Each time, he had excuses: poor accounting by his advisers and the county treasurer, bad practices by a lender. “My net worth is quite substantial,” he told the Reader.

I put in a good-faith effort to hear his explanation for his recent financial woes. I called seven phone numbers believed to be his with no luck and sent two emails that came back. His phone number is not listed. I went to two persons who had communicated with him recently and they would not give out his phone number or email address.

“He always has a story — he is trying to get a deal done, or something like that,” says the T.A. Marsh executive. 

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Comments
14

This sounds like a classic situation of living beyond his means for many years, probably hoping for a turnaround in his fortunes. That leaves many folks asset rich and cash poor. The astute thing to do, from a pure financial standpoint, would be sell the house, get out from under the crushing mortgage and burdensome taxes, and downsize. But he is likely a guy who thinks downsizing is a disgrace and that to pull in his horns would signal a loss of his masculinity.

Feb. 20, 2018

Visduh: Clearly, Lynch has been living beyond his means for several years. I agree: the intelligent thing for him to do would be to downsize his lifestyle, getting out from under his home (that would provide cash), and live a more modest life. From all we know of Lynch, this won't happen. Best, Don Bauder

Feb. 20, 2018

The tax rate on his $3.5 million house is apparently 0.0082?

Feb. 23, 2018

Flapper: Where did you get that numbers? Interesting. Best, Don Bauder

Feb. 24, 2018

Hi Don-How can Lynch, the borrower, "sell his mortgage to Goldman Sachs". Mortgages get sold all the time, but it's the lender doing the selling, not the borrower. BTW-Started reading your articles(which I've always liked) when I moved to SD in 1973. You're the reason why I pick up a Reader each week. I hope you keep it up for many more years!

March 3, 2018

SDJG: Capital One was the bank involved in the transaction. The point I was trying to stress is that this Goldman Sachs subsidiary only buys nonperforming, distress mortgages.

You arrived in San Diego the year of my arrival -- 1973. That's a long time to be reading my material. Keep it up for many years? Yes, I would like to do that, but I am 81, vulnerable to disease, pestilence, collapse, and other woes of old age. Best, Don Bauder

March 3, 2018

Lynch needs to cut his losses, sell the large home, down size to a smaller place and reorg his finances...Otherwise, he may be headed to BK and the Court and Creditors will do it for him..

March 7, 2018

SportsFan0000: I could not locate Lynch. If you can find him, give him that advice. Best, Don Bauder

March 7, 2018

Maybe Lynch is ensconced at Manchester's updated Financial Center at Fifth Avenue and Laurel Street in Bankers Hill/West Park?

March 7, 2018

dwbat: Possible, but I don't know about that. Manchester was mad at Lynch for his mismanagement of the U-T. Best, Don Bauder

March 7, 2018

Manchester should have been mad at himself, for hiring a radio guy to run a daily newspaper. That was so stupid; as foolish as launching the Manchester Pacific Gateway project while having NO financing to build it. Is his company a house of cards?

March 7, 2018

dwbat: I agree with you, particularly because it was Lynch who talked Manchester into buying the U-T. But you don't expect Manchester to admit that it was his fault, do you? Best, Don Bauder

March 8, 2018

Of course not. He follows the Trump playbook.

March 8, 2018

dwbat: There are definite psychological similarities. Best, Don Bauder

March 8, 2018

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