The Emmer Home Companion: living within one’s means by means of seven mortgages


Tom Emmer is fond of saying that that he’d run the state’s finances the way he’d run those of his own household, that families in hard times:

“are living within their means, they are spending less money overall, and they are focusing their spending on essentials. That is exactly the way state government must behave.”

So has Tom Emmer behaved that way in his own family’s finances?  When I take a look at his papers, it doesn’t look like it when it comes to financing his home.

Tom Emmer’s own history of mortgages isn’t like that of most Minnesota homebuyers, who like most Americans, secure 30-year loans. Instead, he’s taken out seven mortgages on his home since he bought it in 2002. Yes, indeedie: seven mortgages in eight years, if I read documents a friend passed along to me correctly.

Emmer’s first mortgage on his home in Delano was an unconventional two-year mortgage. The $300,000 mortgage from State Bank of Loretto, secured in September 2002, appears to be the sole instrument used by Emmer to finance the $425,000 purchase price of the home. I haven’t seen a record of the satisfaction of this mortgage before its October 2004 maturity date. (Wright County Property Records, Document 820583; All records were found at the Wright County Auditor’s office.)

It appears as though each mortgage on Emmer’s home, including the original, have been unusual short-term instruments. He has twice used home equity credit lines of $250,000 to finance his home.

Though Emmer’s first mortgage didn’t mature until October 2004, he refinanced his house in February of that year with refinanced mortgage from Home Town Mortgage Inc. for $307,000, for a $7,000 increase from his first mortgage.

The February 2004 mortgage matured after seven years and allowed Emmer to refinance to a more traditional 30-year mortgage at maturity. Emmer satisfied this mortgage only five months later on July 6, 2004. (Wright County Property Records, Documents 896294, 917166)

He then refinanced five months later on July 2, 2004, using another unconventional method of financing his home when he used a $250,000 line of home equity credit from the State Bank of Loretto to satisfy his earlier mortgage. The line was at anadjustable rate and matured five years later in July 2009. (Wright County Property Records, Document 920588).

Things got a little more hairy in 2005.

In November, Coleman, Hull & Van Vliet, PLLP, on behalf of the State Bank of Loretto, holders of Emmer’s mortgage, issued a Notice of Pendency of Proceeding to Foreclosure Mortgage on the property. (Wright County Property Records, Document 988266)

Disaster was headed off on January 5, 2006 when Emmer obtained a new mortgage on the property from First Commercial Bank. The new mortgage allowed him to satisfy his mortgage with State Bank of Loretto, and foreclosure proceedings ceased. The January 2006 mortgage was a $250,000, 5-year home equity credit line with an adjustable rate. (Wright County Property Records, Document 996296, 999699)

Almost two years after narrowly avoiding foreclosure, Emmer refinanced his home on November 11, 2007, securing a $280,000 five-year mortgage from KleinBank. (Wright County Property Records, Document 1074044)

It doesn’t end there. March 18, 2010, Emmer took out another mortgage on his home. The
principle on the loan was $197,090.97, but included the ability to roll in other debt held with the lender, First Commercial Bank, up to a total of $250,000. The loan comes due February 15, 2011, less than a year after it was originated. (Wright County Property Records, 1144571).

According to MarketWatch’s Rachel Koning Beals in 2006, “exotic” mortgages aren’t the norm. In fact, 72 percent of Americans buying homebuyers using mortgages opt for the old reliable 30-year fixed-rate mortgage:

Despite their prominence in the news, exotic mortgages do not, in fact, entice all that many Americans. The good old 30-year fixed-rate mortgage is still used by 72 percent of U.S. homeowners, although that loan type is less popular in the West, where home prices have been highest.

So was Emmer living within his means, despite this exotic borrowing? It’s a judgement call, but my readers might wish to take another look the June 22, 2010 article, Emmer’s feisty spirit fuels legal fights. In 2006:

Tony Poppler, 35, of Corcoran, runs a small landscaping business that was hired by Emmer’s wife, Jacquie, in 2006 to grade land, build a rock wall, dig a trench and replace rocky soil at Emmer’s Delano home. Jacquie Emmer later added excavation for a hockey rink and garden.

There was no formal, written contract. When he finished the work, Poppler sent Emmer a bill for $3,237, which included removal of 18 truckloads of soil.

Emmer gave him $2,000 and said in his statement that the landscaper “overcharged for work.”

When Poppler took Emmer to small claims court to recover the remaining $1,237, Emmer sought $3,600 in attorney’s fees for his time in small claims court. Poppler didn’t back off.

In small claims court, District Judge Kathleen Mottl awarded Poppler his entire claim. She added that Emmer’s “request for reimbursement of ‘attorney’s fees’ is wholly inappropriate, as he represented himself.”

Emmer took his appeal to District Court, where his lawyer argued that he wasn’t responsible for the landscaping bill because his wife had initiated and modified the job.

Earlier, Mottl had disagreed with that notion. “She essentially did so as her husband’s agent,” she wrote.

But District Judge Dale Mossey ruled that Emmer was not responsible for his wife’s actions. Poppler said Jacquie Emmer has not paid the $1,237.

Were the Emmers belt tightening, after the 2005 experience? Apparently not — they were installing a rock wall, creating a garden and putting in a hockey rink.