How Rick Santorum got a $2 million Virginia estate

Steve Contorno

Rick Santorum built his presidential candidacy on the premise that he is very different than wealthy, establishment front-runner Mitt Romney, that he is someone who has faced the plights of the average American. Among the hardships Santorum claims to share is an underwater mortgage, the kind that's forcing millions from their homes.

"The value of my house is a fraction of what it was when I bought it," the former U.S. senator from Pennsylvania recently told Michigan supporters.

But the Republican presidential contender's housing situation is quite unlike the one so many other Americans actually face, according to experts and documents obtained by The Washington Examiner.

Santorum bought his $2 million, five-acre home in the tony Washington suburb of Great Falls, Va., in August 2007 through a trust in a deal aided by a high-profile tax lawyer who serves as an officer for one of the largest homebuilders in the country.

Tax assessments show a nearly 25 percent drop in the house's value since its peak in early 2008 just after Santorum purchased it. Yet, while most underwater homeowners can't get refinancing needed to save their homes, Santorum got several new loans at reasonable rates over the years. And while millions already lost their homes or risk that daunting prospect, Santorum faces no such threat.

There was nothing illegal about how Santorum bought his house, but, as Benjamin Leigh, a top real estate lawyer in Northern Virginia, put it: "It's not what Main Street does."

"What he did fits the bill for a Washington power type," Leigh said.

Santorum's Virginia home is actually one of two he owns. The other is in Pennsylvania, though political critics have long complained that he doesn't live there and keeps it only to maintain residency in an area he once represented in Congress. His family lived in Leesburg, Va., while he served in the Senate.

Santorum bought the Great Falls house in 2007 after losing a re-election bid in Pennsylvania. But rather than buy it outright, as average homeowners do, Santorum got help from a top officer of one of the nation's largest homebuilders, James Sack of NVR Inc., to set up a special trust that actually bought the home.

While trusts are common estate planning tools that help protect family property, Virginia real estate experts said Santorum's Creamcup Trust served mainly to hide the fact that Santorum was buying a bigger home just outside the Washington Beltway even though he no longer served in Congress.

"That's somebody not wanting to be transparent," said Gant Redmon, a real estate lawyer in Northern Virginia.

The Santorum campaign would not comment on his housing situation. Spokeswoman Alice Stewart said no voter had brought up the issue to the campaign and questioned why it was a story. Sack, the attorney who helped set up the trust, did not return phone calls.

But documents show that the Creamcup Trust, named for the privately owned street on which the home is located, took out the $1.5 million mortgage on the 4,900-square-foot house in 2007, just as a national housing bubble was about to pop. The use of the trust hides from public view who put up the hundreds of thousands of dollars that the Santorums needed as a down payment, though the couple sold another home in Leesburg before buying the Great Falls house. Santorum and his wife, Karen, also took out a $200,000 loan from the same bank that granted the Creamcup Trust a mortgage, repaying it just a year later.

Two years after buying the house, which features an 800-square-foot outdoor swimming pool and a 704-square-foot basement rec room, the Creamcup Trust in 2009 transferred the property to Santorum and for the first time his name appeared on the deed. The $1.5 million mortgage taken out by the trust was paid off, though not until a year later.

Though tax assessments show that the house declined in value by nearly 25 percent, Santorum was able to secure a nearly $1 million, 30-year mortgage in February 2010, records show. Within the year, he secured a second loan at a more favorable 4 percent interest rate and paid off the first loan, according to records.

The house's value is still higher than what Santorum owes on it, which means it's probably not underwater in the same sense as the 11 million Americans whose homes are worth less than what they owe, experts said. It's those people, not Santorum, who risk losing their homes.

"The bank might foreclose. They might try to sell. They're going to have to bring money to the table," Leigh said. "What happens with most people is they're going to give the keys to [the] lender."

Santorum's strategy: Be average
Former Sen. Rick Santorum has sustained his presidential campaign by besting Mitt Romney among working class, conservative voters, who feel an affinity for the former Pennsylvania senator that they don't feel for Romney, the party's front-runner. Santorum courts those voters with speeches peppered with stories of a childhood in blue-collar Pennsylvania and a coal-mining grandfather whose "hands dug freedom for me." He talks about how leaving a lucrative job to run for president forced his family to start "spending down our savings" just as three of their seven kids are preparing to enter college. And he pledges to create new working-class jobs in manufacturing. That appeal to average Americans paid off on Super Tuesday, when Santorum won three states and nearly stole Ohio from Romney. Polls showed that Santorum's strength came from voters who earned less than $100,000 a year, a group that made up nearly 70 percent of the Ohio electorate, and those who describe themselves as very conservative. And that gap only widened in Southern states like Tennessee and Oklahoma, where Santorum dominated.

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