The Housing Bubble

A report from the San Diego Reader in California. “Rancho Santa Fe’s Irene Valenti runs a matchmaking service claiming to tie rich and/or talented women with rich and/or talented men. However, as revealed a year ago, she herself wouldn’t qualify for a match. She went into Chapter 7 (liquidation) bankruptcy in 2012 and was hit with around 30 civil fraud lawsuits when the purported matches didn’t work out. She still has troubles. This Friday (August 31) her home at 16275 Via De La Valle, Rancho Santa Fe, will go up for foreclosure auction at 9 am. Zillow’s foreclosure estimate is $2.6 million and the opening bid is at $2.1 million. The estimated mortgage is $11,803 a month. She uses this home as her office. She has another Rancho Santa Fe home.”

“‘The business is not in trouble,’ she says. ‘I am just a humble person. I have been doing this a long time.’”

The Palm Beach Daily News in Florida. “A federal grand jury in Connecticut has indicted Palm Beach developer Robert V. Matthews and wife Maria “Mia” Matthews on a charge of felony tax evasion related to the Palm House case — the 21st charge in the case against Robert Matthews but the first against his wife.

For Robert Matthews, 60, the tax-evasion charge is in addition to the 20 counts he faces for allegedly scheming to defraud foreign investors in the long-dormant Palm House hotel condominium project on Palm Beach’s Royal Palm Way, according to federal investigators. The tax-evasion charge against the Matthewses is part of a 21-count “superseding indictment” returned by the grand jury. The original grand jury indictment was returned in March and led to the arrest of Robert Matthews and Palm Beach real estate attorney Leslie R. Evans, 71, at their Palm Beach homes on fraud and money-laundering charges related to the Palm House.”

“Robert Matthews and Evans pleaded not guilty to all the charges in the original indictment. Both men are free on bond.”

“Foreign investors put money into the Palm House project through the federal EB-5 program, which offers foreign nationals and their families expedited permanent immigration visas — commonly known as green cards — into the United States in exchange for investing in U.S. construction projects under specific rules, the indictment said.”

“Last month, U.S. Securities and Exchange Commission initiated a separate eight-count civil complaint accusing Robert Matthews, Royal Palm Beach resident Joseph J. Walsh Sr. and two of Walsh’s companies of securities fraud by misusing millions of dollars solicited from EB-5 for the Palm House. That action was filed in U.S. District Court for the Southern District of Florida, demands restitution and money penalties, and mentions the possibility of a jury trial. Walsh and his companies have not been charged in the Connecticut case. Court filings show EB-5 investors lived in China, Iran and Turkey.”

“In early August, the Palm House’s court-appointed receiver filed for voluntary Chapter 11 bankruptcy on behalf of its ownership company, 160 Royal Palm LLC, which owes nearly $115 million to creditors, court filings show.”

From Nine News on New York. “This unusual space-ship style home in Mill Basin, Brooklyn, has finally sold — but for a huge 67 per cent discount off the original asking price. Every home buyer loves a bargain, but imagine snagging a home for two thirds less than the original asking price. That’s exactly what the proud new owners of this unusual mansion in Brooklyn have done, after managing to buy the property for $27.2m (US$20m) less than it was initially listed for.”

“On the market for a staggering five years, the four-storey home was originally listed for US$30m back in 2013, but the price was eventually dropped down to US$17m in 2014 when the owners were unable to sell. Fast forward to 2018, and after being removed from the market, the four-bedroom, eight-bathroom mansion was relisted for US$18m in January this year, before having the price slashed in order to secure a sale.”

The Williston Herald in North Dakota. “Williams County is looking at a substantial spike in properties that have been delinquent on their taxes for three years in a row, and thus are in danger of being sold to satisfy the debt.Deputy auditor Jim Ryen said he’s seeing that next year’s watch list could be even larger than this year’s. ‘Next year’s is starting at 1,106 properties that have the potential for delinquency,’ he said.”

“And the year after that, the watch list is so far at 5,063 parcels — though many of those still have time to pay off the debt, Ryen pointed out. In general, the spike in tax foreclosures is mimicking the pattern of the 80s, Ryen added. ‘In a boom-bust cycle it happens like this,’ he said. ‘You are in such a rush to build and accommodate, and then all of a sudden we glut the industry.’”