"We would hear every excuse in the book," he said. "Our problem was, we knew we needed the money, but we didn't know how to approach the subject delicately with guys we considered our friends."
"There are so many costs that come with operating a house ... the mortgage, the insurance, the upkeep," he explained. "On top of that, it's hard to compete with off-campus housing. You struggle to give these men a little bang for their buck."
Schmitz, a 1985 Ball State University alumnus, is the local alumni adviser for Ball State's now defunct chapter of Lambda Chi. The fraternity, founded locally in 1951, had its charter pulled by its national chapter in December for failing to meet expectations.
Now Schmitz is heading up the effort to sell the Lambda Chi house, at 1110 Riverside Ave. The asking price? $450,000.
[...]
Given the track record of fraternities that co-signed loan agreements with Ball State, university officials say they do not intend to guarantee future loans.
"It's simply not fiscally possible for the university to continue a practice that has proven to have such a high risk," said Glenn Augustine, associate director of university communications.
Two existing fraternities, Phi Delta Theta and Sigma Phi Epsilon, still have loan agreements with the university but neither is defaulting on payments.
Phi Delta's loan was the first guarantee issued by Ball State in 1988 for $369,000. Sig Ep's loan guarantee for $570,000 was issued in 1991.
Under the arrangement, Ball State guaranteed a specific portion of each fraternity's loan to build or remodel an existing house. For the three fraternities that defaulted, Ball State paid the outstanding balance of the loan so the university could own the property.
