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Petitioner and Ms. Head began building a residential structure for
investment speculation purposes on the Jensen Road property (the
Jensen Road house or house) in that year. During the construction,
petitioner and Ms. Head resided in a mobile home. Construction of
the Jensen Road house was completed in September 1980. The Jensen
Road house was immediately put up for sale; a potential purchaser
was located, but the anticipated sale did not materialize. Because
petitioner and Ms. Head had no other residence, and the house could
not be insured if vacant, they moved into the Jensen Road house in
late October 1980. Petitioner lived in the Jensen Road house until
June 1985. Ms. Head lived in the Jensen Road house until May 1986.
The Norwest Commercial Bank Loans
In January 1983, petitioner borrowed funds in the amounts of
$10,000 and $40,000 from Norwest Commercial Bank (NCB), securing
both loans with a mortgage against the Jensen Road house. In May
1984, petitioner borrowed an additional $2,000 from NCB, again
securing the loan with a mortgage against the Jensen Road house.
Petitioner used a portion of the loan proceeds to operate a
retail coin and stamp business and a portion of the loan proceeds
for personal purposes. He operated the coin and stamp business
until April or May 1985. In June 1985, petitioner moved to
California, where he began working for The Boeing Co.
The Foreclosure
On May 27, 1986, NCB foreclosed upon its mortgages and took
possession of the Jensen Road property and house. At this point in
time, Ms. Head moved out of the Jensen Road house.
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Last modified: May 25, 2011