DS News - Digital Archives

IN THE NEWS Trump's Real Estate School Deemed a 'Scam' by NY Attorney General Donald Trump and Trump University, a real estate investment school in New York, face a lawsuit accusing Trump and his school of defrauding consumers of $40 million. Trump University functioned as a real estate school, luring students with promises that they would learn Trump's personal real estate methods and ensuring their success in real estate investment, according to New York Attorney General Eric T. Schneiderman. But Schneiderman says the school did not deliver on its promises. "Mr. Trump used his celebrity status and personally appeared in commercials making false promises to convince people to spend tens of thousands of dollars they couldn't afford for lessons they never got," Schneiderman said in a press statement. Instead of the real estate education they were promised, Schneiderman says more than 5,000 students "got a hard lesson in baitand-switch." Trump adamantly denies the charges and says he will not settle the case but instead will fight it in court "on principle." During a phone interview on The Today Show, Trump called the attorney general a "total lightweight" and "very unpopular," accusing Schneiderman of soliciting campaign funds from Trump's staff and attorneys during the investigation into Trump University. Ads for Trump University featured Trump's image and signature, promising students would learn "from Donald Trump's handpicked instructor a systemic method for investing in real estate that anyone can use." Schneiderman says his investigation into Trump University revealed the instructors were not "handpicked" by Trump, and Trump was not involved in curriculum development. Furthermore, during initial seminars, students were encouraged to participate in "Elite mentorship programs costing $10,000 to $35,000," according to Schneiderman. "While consumers were encouraged to call their credit card companies during breaks, to increase their credit limits to have access to funds to do real estate deals, the real 88 reason Trump University asked consumers to request higher credit limits was so they could use the credit to pay for the expensive Elite programs," Schneiderman said. Schneiderman also called attention to issues with the school's name. In 2005, the New York State Education Department demanded Trump University discontinue the use of its name as it did not have the accreditation to call itself a "university." According to Schneiderman, the school continued to call itself "Trump University" until 2010, and "[a]s a result, many students believed they were attending a university, when they were not." During his interview on The Today Show, Trump countered that the students "knew exactly what they were doing and what they were getting." He also said he was very involved with developing the school and its curriculum. Upstate New York, Leads Recovery The housing recovery is widespread, though it is moving at different paces in various parts of the country, according to a new Housing Market Recovery Index published by RealtyTrac. Metros in Upstate New York, Southwest Florida, and the Bay Area of Northern California are ahead of the curve, according to RealtyTrac. "The U.S. housing market has clearly shifted to recovery mode over the past 18 months, with home prices consistently rising and foreclosures falling closer to pre-housing bubble levels," said Daren Blomquist, RealtyTrac VP. He stressed during a webinar accompanying the release of the index report, however, that different markets across the country are experiencing their own levels and rates of recovery. RealtyTrac observed 100 large U.S. metro areas for evidence of recovery based on seven indicators: unemployment rate, rate of underwater homeowners, change in foreclosure activity from its peak, change in median home price from its trough, percentage of distressed sales, share of sales to institutional investors, and share of cash sales. Rochester, New York, topped the index with its low unemployment rate, low underwater rate, small percentage of distressed sales, large drop in foreclosures, and rising home prices. So far, home prices in the area have risen 93 percent above their trough, and only 7 percent of homeowners are underwater. Cape Coral-Fort Myers, Florida, ranked second with rising prices driven by high levels of investor activity and cash purchases. Pulling at the threads of the metro's recovery, however, is a high share of underwater homeowners and distressed sales. Another Upstate New York market—Albany—took the No. 3 spot on RealtyTrac's index, followed by two markets from California's Bay Area: San Jose and San Francisco. The Bay Area is benefiting from strong employment, falling foreclosures, and rising prices. At the bottom of the list, Baltimore, Maryland, demonstrated "underperforming numbers for all factors except for underwater percentage and cash purchase percentage," according to RealtyTrac. Baltimore's market is improving, just not as quickly as other markets. For example, its median home price is 9 percent above the trough, but nationally, prices are 19 percent above their bottom. Foreclosure activity is 26 percent below its peak in Baltimore but 65 percent below the peak nationally. Davidson Fink Attorneys Receive Recognition Davidson Fink, LLP, recently announced that seven attorneys representing the firm earned spots on the Super Lawyers list for 2013 and seven were named among the Best Lawyers in America for 2014. Super Lawyers recognizes attorneys from more than 70 practice areas using a patented, multi-phased selection process. Recognition is based on peer nominations, evaluations, and third-party research. On the Super Lawyers list this year from Davidson Fink are S. Gerald Davidson, Robert G. Greene, Gregory J. Mott, David L. Rasmussen, Heather C.M. Rogers, Jill K. Schultz, and Scott A. Sydelnik, who also earned the Super Lawyers Rising Star designation. The attorneys were named in the practice areas of family law, real estate, bankruptcy, and estate and probate. Seven Davidson Fink attorneys also earned a spot as 2014 Best Lawyers in America. Inclusion is based on peer reviews with attorneys selected according to their practice area. The attorneys from Davidson Fink that received the Best Lawyers designation include Walter R. Capell, S. Gerald Davidson, Thomas A. Fink, Robert L. Galbraith Jr., Leslie W. Kernan Jr., Gregory J. Mott, and David L. Rasmussen.

• Cover