Trump University seized upon foreclosure crisis
As millions of people were losing their homes in the depth of the recession, instructors at Trump University were urging students to seek out anxious or desperate sellers to reap a financial windfall, according to recently released documents in the federal class-action lawsuit against presumptive GOP presidential nominee Donald Trump.
The now-defunct for-profit real-estate school, founded by Trump and two associates in 2004, offered workshops on how to take advantage of the foreclosure crisis in some of the hardest hit states, including California.
In a 2008 slide aimed at persuading potential students to sign up for a three-day, $1,495 workshop, Trump is pictured alongside a quote: “I’ve always made a FORTUNE in FORECLOSURES, and YOU WILL TOO. The timing will never be better than NOW! My recommendation is that you attend our retreat. ENROLL TODAY!”
That year, more than 2.3 million foreclosures were filed across the nation, including more than a half-million in California, said Daren Blomquist, a senior vice president at RealtyTrac, a housing data firm. “It was the height of the foreclosure market.”
Trump was certainly not alone among investors who sought to make a profit by purchasing foreclosed or distressed properties at a deep discount. These investments helped the housing market eventually rebound, Blomquist said.
But what is routine in business can be controversial in politics, as seen in Democrats’ successful 2012 effort to brand that year’s GOP nominee, Mitt Romney, as a heartless corporate vulture.
In a similar move, Democrats seized upon Trump University’s focus on foreclosures as an example of Trump’s willingness to profit on Americans’ suffering.
“It’s really offensive,” said state Controller Betty Yee, who has endorsed presumptive Democratic nominee Hillary Clinton. “He’s looking at really taking advantage of vulnerable communities to line the pockets of the wealthy.”
The Trump campaign did not respond to a request for comment.
In May, when Clinton castigated him for comments he made in 2006 and 2007 about the opportunities to make money if the housing market collapsed, Trump countered by saying that he was a businessman.
“I have made a lot of money in down markets. In some cases, as much as I’ve made when markets are good. Frankly, this is the kind of thinking our country needs, understanding how to get a good result out of a very bad and sad situation,” he said. “Politicians have no idea how to do this — they don’t have a clue.”
The revelations about Trump University’s focus on foreclosures are found in documents that were unsealed in late May by U.S. District Judge Gonzalo Curiel in San Diego. They are part of the exhibits in a fraud trial that is scheduled to begin after the November election.
The fraud allegations have already been raised by Trump’s GOP rivals in the Republican primary and by Clinton, as recently as Tuesday. The San Diego lawsuit — one of three pending against Trump involving the university — was most recently in campaign news because Trump repeatedly said that Curiel could not oversee a fair trial because of his “Mexican heritage.” The remarks drew widespread condemnation from both sides of the aisle.
The hundreds of pages of documents include advertisements, speaker scripts and slide shows for a free introductory workshop designed to enroll students in longer classes and memberships that started at $1,495 and topped out at $35,000.
A 2009 newspaper ad for introductory Trump University classes in Monterey, San Jose and Fremont urged prospective California students to “Cash in on the Greatest Property Liquidation in History!”
This was during the peak of the housing crisis, with 2.8 million foreclosures filed across the nation. Some of the ads targeted the hardest-hit states. In addition to California, Trump University ran similar ads in Florida and Nevada, both of which are battleground states where Democrats will likely raise the matter in the general election.
“It’s certainly not out of the question that we would want to make sure people knew this guy was taking advantage of people losing their homes, or taking advantage of people who thought they could get rich quick because of the housing market crash,” said Justin Barasky, spokesman for Priorities USA Action, a pro-Clinton super PAC that has $47 million in the bank and commitments for another $45 million to take on Trump.
When pitching the “Fast Track to Foreclose Investing” system and a proprietary “Trump’s Foreclosure DealSource” software to prospective students, speakers described the mortgage meltdown as a historic opportunity to make money.
One compared it to “The Perfect Storm,” a 2000 movie about a commercial fishing boat that sank after being confronted by two storm fronts and a hurricane off Massachusetts.
“Well the same thing has happened in the housing industry and that’s an incredible opportunity for us,” according to a speaker script. “Everything is coming together in a perfect storm that may swamp some folks, but if you are properly trained and supported you can prosper.”
Investors were advised to target distressed home sellers by looking for keywords in newspaper ads, such as “anxious owner” and “seller desperate.”
Students were told they could save underwater homeowners’ credit, possibly through a short sale. A slide featuring Trump’s picture included a quote: “There is no reason why an investor can’t make money and help people at the same time.”
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