The new flipping: short sales [South Florida]

The new flipping: short sales [South Florida]

Untold millions of dollars that banks could have recovered from the sale of distressed Florida homes have instead been pocketed as profits by a new breed of property flipper.

These flippers target houses on the verge of foreclosure and persuade banks and mortgage companies to accept lowball buyouts, sometimes by using questionable appraisals and not disclosing that a quick sale at a higher price has already been arranged, experts say.

No one knows how widespread the scheme has become. But a national glut of short sales — pre-foreclosure sales in which the lender agrees to let the house sell for less than the mortgage owed — has spawned a small industry of short-sale flippers, some of whom use these questionable tactics, experts say.

Homeowners left in a lurch after mortgage refinancing checks bounce

Homeowners left in a lurch after mortgage refinancing checks bounce

In early April, Jeff Franson refinanced his mortgage, switching it from Chase to SecurityNational Mortgage Co.

On a sunny Saturday in early October, as he was mowing the front lawn of his Mokena, Ill., home, a process server drove up and handed Franson papers that showed Chase was planning to foreclose on his home.

Franson was current on his mortgage with SecurityNational. But the $93,702.51 check cut by Counselors’ Title Co. to pay off the Chase loan bounced. After months of phone calls and letters between Franson, his attorney and the companies involved, Chase filed foreclosure papers.

For consumers refinancing mortgages, sitting down in a sterile conference room of a title company is considered the last step, a formality, in the loan process. After signing a thick stack of documents, borrowers leave happy that they’ve just saved money by obtaining a lower interest rate.

Districts in Distress [South Florida]

Districts in Distress [South Florida]

Stressed community development districts in Florida this month have told bondholders that they continue to rely on reserves to make debt ­payments. Some have filed notices of default and analysts expect their number to increase.

The state currently has 571 active CDDs, according to state records. Since the early 1980s, the districts issued more than $11 billion of debt. Most are structured with payments due the first of May and November, and using reserves is not considered a “default” in their bond covenants.

However, because of Florida’s prolonged real estate crisis some CDDs have used reserves for as long as 18 months and a growing number of experts who follow the so-called dirt bonds consider them to be in default.

Compared with most other states there have been a disproportionate number of muni payment defaults and filings related to using reserves in Florida because of CDDs, according to Matt Fabian, ­managing director of Municipal Market Advisors, whose weekly column distinguishes between defaults and other credit impairments.

When government auctions went online, what was for sale got lost

When government auctions went online, what was for sale got lost

Erika Ginsberg-Klemmt and William Anderson met online, but not in a good way.

Driven by the misconception that they had stumbled on a brilliant formula that would allow them to buy a Siesta Key condominium for pennies on the dollar, the two novice real estate investors began unknowingly bidding against each other on Sarasota County’s new online auction Web site.

Anderson ended up prevailing with a bid of $86,001 and believed that he held unencumbered title to a condo once valued at $327,000. But all Anderson really won was the right to pay off $20,000 in unpaid association dues.

More than a dozen investors who made similar mistakes in Sarasota and Duval counties since July are now out hundreds of thousand of dollars.

Even the Rich Are Treating Their Houses Like Piggy Banks

Even the Rich Are Treating Their Houses Like Piggy Banks

In recent years, millions of Americans looked at their houses and saw big, fat piggy banks. And it occurred to them to take out big, fat new mortgages.

Few did it on the scale of Ronald Burkle.

Mr. Burkle, the grocery-store billionaire, has $56 million in loans against two houses, including $9 million added last year. One is his iconic Beverly Hills mansion, “Green Acres,” a 44-room Italian Renaissance palazzo built in the 1920s by silent-film star Harold Lloyd that more recently was a favorite overnight rest stop for Mr. Burkle’s buddy, Bill Clinton.

Mr. Burkle declined to say how he is using the money. There is no indication he needs it to pay the water bill.

Foreclosures crisis caused by investors. And lenders. And politicians. And buyers [Tampa Bay Area]

Foreclosures crisis caused by investors. And lenders. And politicians. And buyers. [Tampa Bay Area]

A simple narrative is often used to characterize the foreclosure crisis at the heart of America’s Great Recession: While banks are at fault for approving risky loans, people who lived in the homes are as much to blame.

Vanity Fair magazine calls American homeowners “infantile” for living beyond their means. Financial pundits criticize them for splurging on swimming pools and three-car garages. A Treasury secretary takes his shot, accusing home buyers of signing mortgages they could never afford.

But a St. Petersburg Times analysis of thousands of foreclosures in Hillsborough County, which has one of the highest default rates in Florida, shows individual homeowners are getting too much of the blame.

The truth is that real estate speculators and revenue-hungry local governments bear just as much of the responsibility — and maybe more — for the collapse in the housing market.