While I agree that it wasn't appropriate for the Rho Chi to say about this chapter's house, and that it's probably a rumor (I've lived in Madison my whole life and I can't remember this particular chapter EVER having a house, although granted I wasn't paying a whole lot of attention to that when I was younger), the overall vibe that people are getting from this house is kind of sketchy. One girl from this sorority asked a girl in my rush group what her parents did for a living -- I'm not sure if she just didn't know that you weren't supposed to ask questions like that or what, but it was very inappropriate. I also asked my rusher what kinds of things they did for their philanthropy and she couldn't tell me. She just said, "Um, well . . . we basically just raise money for them and stuff."
So regardless of whether or not the house thing is true (and I don't think it is), I do think that she should stick with her gut feeling on this particular group.
Side note: this particular sorority originally colonized at our school in the '50s, then disbanded (or whatever the technical term for that is) at some point, I'm not sure when, and recolonized in the early '80s -- so maybe they lost their house after the original chapter lost its charter, and never reacquired a house after recolonizing? Would that make sense?