The News Press reports from Florida. "WCI Communities Inc. announced this morning it expects to record a loss in the fourth quarter due largely to increased contract cancelations. The Bonita Springs-based luxury expected to close 621 traditional homes in the fourth quarter and actually closed 434 at an average price of approximately $760,000 while recording 187 defaults."

"Preliminary combined tower and traditional gross new orders totaled 261 for the fourth quarter but were offset by a combined total of 270 tower defaults and traditional home cancellations and defaults."

"'Results for the fourth quarter will be below prior expectations due to a higher level of defaults...and the recording of significant impairments and write-offs,' CEO Jerry Starkey said. 'The operating environment in Florida continued to be challenging during the fourth quarter and resulted in cancellations outnumbering new orders in that market.'"

The Miami Herald. "In a clear signal that Florida's housing market is weakening, BankUnited Financial on Monday reported a significant spike in problem loans."

"Nonperforming assets more than doubled to $45.1 million for the December quarter from the prior quarter and more than quadrupled from a year earlier, said the Coral Gables-based parent of BankUnited FSB, the largest Florida thrift."

"In a report to clients, Raymond James & Associates analyst John A. Pandtle said while he has long regarded option-ARM loans to be risky 'in a rising interest rates and an overheated housing market, the magnitude of this quarter's asset quality deterioration is surprising even to us.'"

"The rise in troubled loans also reflects the longer time needed to find buyers for foreclosed properties with so many houses on the market, CEO Ramiro Ortiz said."

"The bank said option-ARM loans amounted to 59 percent of its total loan portfolio at the end of last year, up from 51 percent a year earlier. As of Dec. 31, the portfolio of $7 billion option-ARM balances had negative amortization, in which mortgage balances increase over time, of $129.7 million, or 1.9 percent."

The St Petersburg Times. "Construction Compliance Inc. promised surefire investment homes with no money down. St. Petersburg's CCI would build houses on scattered lots from Hernando to Lee counties. Customers could resell them for a profit without spending a dime."

"Not only has CCI ceased construction on scores of homes, but customers also have been left with half-built shells on which subcontractors are demanding payment."

"Bradenton's Coast Financial Holdings Inc., parent of Coast Bank, fretted whether the builder's customers, to which Coast committed $110-million, would 'satisfy their obligations.'"

"Marilyn Schwegman of St. Petersburg is a CCI customer left on the hook for her builder's unfinished work. A Realtor acquaintance put her in touch with CCI in 2005. The company would build her a 2,000-square-foot house in Sarasota County's North Port community."

"'Real estate was good. It was going to be a nice little investment turnaround,' Schwegman said."

"To Schwegman's alarm, certified letters arrived at her house late last year. They were from the company that laid her foundation and a concrete block vendor. She owes them close to $30,000. Turns out CCI wasn't paying the bills, and the subcontractors came after her."

"'I don't know what my options are,' said Schwegman, who turned her home contract over to a lawyer. 'I'm hoping for a loophole. I'm hoping to pull something from the sky on that one.'"

"If CCI collapses, individual borrowers have an obligation to meet their mortgage payments, though Coast suggested that some might default in light of the no-money-down deals they were promised."

"Buyers like Schwegman are kicking themselves. It all seemed so simple when Coast fast-tracked her loan with scarcely a question. 'The qualifications were almost a joke. I was surprised at the time it was so easy,' she said."

The Bradenton Herald. "Coast Bank officials are investigating the status of 482 home loans in jeopardy after a local developer said the company can't finish construction. Possibly losing $50 million in residential loans could mean serious trouble for Coast Bank, an analyst said."

"James Schutz, an analyst with Stern, Agee & Leach, Inc., said the loans, if the bank defaults on them, could be devastating for a financial institution the size of Coast Bank. Much will depend on the progress that has been made on the homes, Schutz said."

"Although Coast Bank officials Monday declined to name the developer involved, all signs point to St. Petersburg-based home developer Construction Compliance, Inc., which has had dozens of liens filed against it in recent weeks."

"Joel Deriso, owner of the Other Side Sod Co. in Arcadia, said he filed more than a dozen liens against the home-builder and is owed more than $28,000 for work he did in Charlotte County and North Port."

"'They have nearly 100 houses down in Rotonda Sands and nearly the same number in North Port and every single home is Coast Bank-financing,' Deriso said. 'Every single notice of commencement I've looked at is Coast Bank of Florida with the common denominator, CCI homes.'"

"In the meantime, local builders were astounded by the amount of money Coast Bank committed to the 482 borrowers. 'It's big. I've never heard of anything happening like that,' said Alan Zirkelbach, a local developer who serves on the board of First Priority Bank. 'That's a very large developer when you've got 482 homes.'"

The Herald Tribune. "Dozens of investors who bought homes from Construction Compliance Inc. of St. Petersburg and who had their loans financed by Bradenton-based Coast Bank are scrambling to hire lawyers to see whether they can recoup their money."

"The investors say they were lured into buying Southwest Florida houses by CCI and were forced to take mortgages from Coast Bank in order to complete the transactions."

"(Attorney) Peter Vasti has been retained by William DeNight and Peter Chicouris, two Realtors in St. Petersburg. DeNight, who also bought a house from CCI as an investor, said he was 'forced to go with Coast Bank' despite having an existing credit line and relationship with Wachovia Bank."

"His Coast line of credit had $80,000 drawn down against it, and 'all I have is a cleared lot,' DeNight said."

"New Jersey resident George Tannous said that he and several friends and family members each agreed to put down $2,500 to $7,500 in what they thought would be a passive investment."

"Each investor 'very quickly had a credit line established at Coast Bank amounting to as much as $300,000 each,' Tannous said. The group was introduced to the CCI deals by Seashore Resorts LLC, a Bluffton, S.C.-based real estate investment company that also has offices in the New York area."

"Seashore principal Joseph N. Carletto said Monday that he and other Seashore executives also are victims. Carletto bought a home in Cape Coral from CCI, he said."

"'As with most investors involved in this situation, we at Seashore Resorts are similarly troubled. The six principal owners of Seashore along with our family and close friends are deeply invested in Florida through Coast Bank,' Seashore Resorts officials said in a letter sent on Monday to the Herald-Tribune. The letter said that 'each of the principal owners of Seashore have homes titled personally in their own names.'"

"'We've all been hit by liens,' said Darren E. Sheehan, a Seashore executive and New York attorney who bought a North Port home from CCI."

"But Joanne Inglese, a New Jersey investor also brought into the deal by Seashore, said that the company 'was broker in the deal.' Tannous, the other New Jersey investor, agreed."

"Inglese said the credit of the investors was used to finance the building of a house. Between the broker, the bank and the builder, the house was to have been financed, built and then sold at a profit as part of the investment package."

"Inglese said she expected a 10 percent slice of the gross sales price or about $30,000 for the use of her credit. Instead she is facing about $70,000 in loans in her name, an untold number of liens."

"Carol Simmons, now a broker and owner of St. Petersburg-based Quantum Realty Solutions, says she sold about 150 CCI homes to financial investors 'all over, from California to New York to Florida,' while working at Dollar Realty and Mortgage in Tampa. 'All of them got their loans from Coast Bank.'"