It’s Like A Big Bomb Went Off In Florida
The St Petersburg Times reports from Florida. “A national report released Tuesday said Florida leads the nation in mortgage fraud. As the report was being released, a federal jury in Broward County was returning guilty verdicts in a scam case that included $5-million in fraudulent mortgages. Howard Gaines, a lawyer who worked as a title agent, was accused of falsifying closing documents. Gaines has not been charged in connection with any of his work in Hillsborough County, where he processed one-third of the home sales by a Tampa tattoo parlor owner named Sang-Min Kim.”
“Sonny Kim, as he’s known, was profiled in a St. Petersburg Times story Sunday that recounted his flipping of properties, about one-third of which have been foreclosed. The story pointed to some questionable mortgages, including one for $300,000 on a run-down house that now can be had for $35,000.”
“Since 2004, Kim has bought and sold about 90 homes in some of Tampa’s poorest neighborhoods. Property records show buyers paid Kim $10.7-million for homes he bought for $6.5-million. Many homes that Kim sold ended up in foreclosure, meaning that many of the same banks that are now getting billions in a federal bailout were left with worthless property.”
“Gaines was convicted of one count of conspiracy to commit mail and wire fraud and two counts of mail fraud. He is scheduled to be sentenced in February. The maximum sentence is 45 years in prison. ‘I’d like to see him get more prison (time); he’s done some bad things,’ said Doug Pollock, a property crimes expert who testified in the trial. ‘I think some prosecutor (in Hillsborough) will use this conviction to say, ‘I want a piece of him, too.’”
“First Franklin approved a $138,000 mortgage for a yellow clapboard house on N 34th Street that Kim sold in 2006. The buyer defaulted within months. It’s listed now at $29,000. ‘Amazing. I didn’t know you could get such high prices in that part of Tampa,’ said Dianne Hart, CEO of the East Tampa Business and Civic Association, which builds houses in struggling neighborhoods. ‘And the banks approved these mortgages? Well, I guess that explains why we’re in the situation that we’re in.’”
“Inez Albury is the only name from First Franklin that appears on the public documents for that loan and two others in Sonny Kim deals that defaulted. Her job was ‘closer.’ During the good times, Albury described an assembly line approach to keep up with demand at her office. Managers made it clear they needed to hit their numbers each month.”
“The pressure was intense by 2006 and early 2007, she said. She reviewed as many as 20 loan applications a day, sending each one down the line to a title agency, sometimes just minutes before a closing. She never rejected one. ‘We had quotas we had to meet,’ Albury said. ‘We didn’t have time to look at them.’”
From Tampa Bays 10. “Hudson and Marshall will host a home auction in Tampa today where dozens of foreclosed homes will be up for grabs. The event takes place just one day after Florida Governor Charlie Crist announced his support of a moratorium on foreclosures on primary residential properties to help families at risk of losing their homes, especially during the holidays.”
“‘I don’t think it will have much of an impact on the local housing market. Unfortunately, it’s just prolonging the inevitable, but I do think it’s a good will gesture by the Governor,’ said Jeremiah Bustin from Vicinity Realty.
“Bustin is a third generation Tampa real estate agent. He says the freeze on foreclosures won’t affect his business because the market is already flooded with foreclosed homes.”
The Herald Tribune. “A two-year crackdown on code violators has cost the city about $340,000 in legal fees, double the amount North Port has collected in fines. Since 2006, North Port has collected only $171,000 of the almost $2 million owed in fines levied for a variety of code infractions, ranging from overgrown lawns to improperly parked cars and building permit paperwork problems.”
“The problem is, even with a favorable court judgment, some property owners cannot or will not pay. And if a bank forecloses on a house, the city might see little or no payment. In other words, the days of selling houses for vastly more than was initially paid for them — the backbone of the lien collection system — are over.”
“‘You can’t get blood from a stone,’ said Commissioner Vanessa Carusone. ‘Let’s face it.’”
“Carusone said she would like to ‘call off the dogs’ when it comes to city liens. ‘It’s a losing proposition,’ she said. ‘You’re not going to get money out of these people.’”
“Another property owned by prominent Venice developer Mike Miller has slipped into foreclosure proceedings after Wal-Mart pulled back from developing a store on the site off Laurel Road. Miller has struggled to meet the debt obligations for his large real estate holdings in recent months, with banks moving to seize a condo development in Bradenton, condos in Venice and vacant land in Englewood.”
“Miller’s lender has its own problems. Orion Bank, one of Southwest Florida’s most aggressive lenders during the real estate boom, is struggling under a heavy burden of nonperforming loans. Other local borrowers sued by Orion include home builders Andrew Coles of Jade Homes; Ronald Mustari of Sarasota-based Whitehall Homes; David Lewis of Palmetto-based DL Homes; and Jack LeFrock and Roger Van Wie of Coastal Cottages of Sarasota.”
“Miller does not believe Orion wants to seize his land. ‘I have something they’re calling a protocol letter, which means they filed foreclosure but they really don’t want the property,’ he said. ‘They want us to get Wal-Mart back or sell it to the bogeyman, I guess.’”
The Orlando Sentinel. “Central Florida businesses are failing at a pace not seen in at least a decade. The first hint of trouble at Kornerstone Tops arrived in 2007. Until its final year, the 7-year-old Orlando company had carved a profitable niche installing Italian-made granite veneer on top of existing counters. It placed counters in homes, businesses, boats, motor coaches and more than 3,000 Walt Disney World hotel rooms, owner Paul Lane said.”
“‘When the mortgage crisis hit, the phones stopped ringing,’ he said.”
“‘I’ve been doing this for 28 years,’ Orlando bankruptcy lawyer Frank Wolff said. ‘It’s like a big bomb went off.’”
“Vickie McCormick and her husband, Michael, are not looking forward to Dec. 22. That’s the day Florida Made Door Co. will begin suspending operations at its plant next to the couple’s My Hero Sub Shop and lay off up to 80 employees. The McCormicks count on business from the door factory, whose office managers and blue-collar workers often stop by to grab a bite to eat during their lunch breaks. ‘It’s going to kill us,’ Vickie McCormick said this week as she prepared a breaded-chicken sandwich for a door-factory employee. ‘We don’t know if we’ll be able to afford it.’”
“‘This action is the result of a continuing decline in the U.S. housing market,’ Mike Fout, vice president of Florida Made’s interior door division for North America, wrote in an e-mail to the Orlando Sentinel.”
“Gloria Lee was told a few days before Thanksgiving that she will lose her job at Florida Made. She has worked at the plant for more than 10 years. ‘It’s hard right now. There’s nothing out there,’ she said. ‘You can’t even get a job flipping burgers right now.’”
The Associated Press. “Max Rameau delivers his sales pitch like a pro. ‘All tile floor!’ he says during a recent showing. ‘And the living room, wow! It has great blinds.’”
“But in nearly every other respect, he is unlike any real estate agent you’ve ever met. He is unshaven, drives a beat-up car and wears grungy cut-off sweat pants. He also breaks into the homes he shows. And his clients don’t have a dime for a down payment. Rameau is an activist who has been executing a bailout plan of his own around Miami’s empty streets: He is helping homeless people illegally move into foreclosed homes.’
“‘We’re matching homeless people with people-less homes,’ he said with a grin.”
“With the recession and the collapse of the housing market, more and more couples who have broken up are continuing to live under the same roof, according to judges and divorce lawyers. Some are waiting for housing prices to rebound; some are trying to get back on their feet financially.”
“These days, Florida Judge John C. Lenderman said, about a third of his cases involve homes that are in foreclosure or that a family is struggling to sell. Lenderman said he has never seen anything like it in 40 years as a lawyer and judge. ‘They just can’t do anything, financially,’ he said. ‘I’ve actually got a number of people, guys who are saying they’re sleeping in their cars or pickup trucks, not paying their child support or anything. I’ve got some folks here who are down to flipping burgers.’”
“Linda Melville filed for divorce from John, her husband of 13 years, in August. Four months later, the estranged couple are still living on the same property in St. Petersburg, Fla. Linda was laid off from her job in October and said she cannot afford to rent a place on her own. And so, while she looks for a job and tries to start the next chapter of her life, she remains in the home where the couple — who had no children together — celebrated holidays, put in a back deck and laid flagstone steps together outside the front door.”
“‘Living as close as we do, it really makes it difficult to achieve closure,’ she said recently.”
The Island Reporter. “It’s all about the water. It’s the water that attracts the tourists, who fill the hotels and make purchases at local businesses, which pay the taxes, which finance government, which has a responsibility to keep that water — and the beaches — as clean as possible.”
“That’s the message City Council delivered to State Representative Gary Aubuchon Tuesday when he made an appearance at the Council’s regular meeting – and it’s a message Council asked Aubuchon to support and defend when he returns to Tallahassee in preparation for the upcoming legislative session.”
“While issues concerning water cleanliness and quality are of the utmost importance to the local economy…the Council recognized the existence of other issues affecting the economy and asked Aubuchon for his point of view on those issues. ‘We need to change the message,’ said Aubuchon, who claimed a special insight into the local economy from his position in the real estate industry. ‘We see people on vacation considering moving here, as well as citizens who are departing,’ he said. ‘So, why are they leaving?’”
“Aubuchon said that the housing boom of the past several years systematically eliminated baby boomers from the local housing market in 2005 and 2006.”
“‘With the median price of homes at $321,000 back then, many if not most baby boomers were priced right out of the market,’ said Aubuchon. ‘What we need now is a baby-boomer do-over. With median home prices in Lee County now at $140,000, those baby-boomers have the chance to retire once again. Our new message has to be that there is now a whole new chance for you to call Lee County home.’”
