Mortgage-Fraud Crackdown Is Gathering Steam in Florida

Mortgage-Fraud Crackdown Is Gathering Steam in Florida

Florida’s Gulf Coast was crawling with shady real estate investors like Neil Husani during this decade’s housing boom. According to the U.S. Attorney’s office in Tampa, Husani and three co-conspirators working with his Sarasota-based Capital Force, Inc., bilked seven area banks out of $83 million in a mortgage fraud scheme. Between 2003 and 2006, they bought up dozens of properties, used false information to secure mortgages far in excess of the actual property values, then pocketed the difference, which amounted to more than $40 million. The properties went into foreclosure and the banks, as well as the surrounding communities, were left holding the bag. Two of Husani’s partners recently pleaded guilty to the conspiracy; another was convicted, and Husani, whose trial is pending in the U.S., has been arrested in Jordan, where he awaits extradition.

The Capital Force case is one of the largest mortgage frauds to date in Florida, but it’s just the tip of an iceberg of scams that have wrecked broad swaths of the state’s reeling housing and commercial real estate market. The situation is worst along the I-4 Corridor between the Tampa and Orlando areas, where almost 30,000 homes are in foreclosure. (Lee County, in fact, has one of the nation’s highest foreclosure rates, at about 12%.) In recent years, fraud — involving either property purchases like Capital Force’s, or schemes that falsely promise to help desperate homeowners hang on to their houses and then take the money and run — has mushroomed. Now, the U.S. Attorney’s office in the Middle District of Florida tells TIME, federal agents and prosecutors have embarked on a “surge” of mortgage and loan-modification fraud investigations that could result in more than 200 indictments this year in the Tampa region alone. “The idea is to do as many cases as we can at once,” says Tampa U.S. Attorney Brian Albritton, “to clearly send a message that this is not going to be tolerated.” (See 25 People to Blame for the Financial Crisis)

How to leverage your IRA property investments with mortgages

How to leverage your IRA property investments with mortgages

So you’d like to take advantage of depressed housing prices and buy a rental property, but you lack a down payment or can’t meet lending criteria for investment properties? Consider using your IRA assets — even if the purchase price exceeds their reach.

Little-known IRS rules allow retirement savers to take “nonrecourse” loans against IRAs and leverage their savings as a down payment to buy investment real estate. With 30% to 40% down, IRA borrowers can get loans on a condo or townhouse, a single-family home, a multiunit apartment building and even commercial property — so long as the rental income will yield positive cash flow.

While the market for these mortgages has been miniscule — recognized leader North American Savings Bank has closed about 850 residential IRA loans since 2005 — demand is expected to mushroom in coming years, especially among baby boomers seeking to diversify out of stocks and into income-producing investments.

Study Buoys Mortgage Modification

Study Buoys Mortgage Modification – WSJ.com

Cutting financially troubled borrowers’ monthly mortgage payments by more than 10% reduces the chances that they will fall behind again after their loan is modified, a study found.

While modifications that result in lower payments are increasing, nearly half of all loan workouts still result in the same or higher payments, the study found.

The report, released Friday by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, comes as mortgage companies are preparing to modify loans under the Obama administration’s foreclosure-prevention plan, which provides financial incentives to encourage mortgage companies and investors to reduce borrowers’ mortgage-related payments to 31% of income.
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It could help allay concerns that scores of borrowers whose loans are reworked will fall behind again on their mortgages, leading to higher losses for lenders and investors who hold these loans.

Separated by a Common Tongue: Foreclosures Trap Translators in Middle

Separated by a Common Tongue: Foreclosures Trap Translators in Middle

For years, interpreter Yu Ching ended many calls by saying, “Congratulations. You have been approved,” as she helped credit-card companies and mortgage lenders reach a growing share of the Mandarin-speaking market in the U.S.

But on a recent morning, the call-center interpreter didn’t have the last word. “You’re sending me off a cliff,” shrieked a woman, after Ms. Ching relayed a bank official’s refusal to let the woman avert foreclosure by selling her house for less than the value of her mortgage.

Ms. Ching, and legions like her, occupy unique listening posts in a changing economy. During boom times, these telephone-based interpreters enabled financial companies to push loans, mortgages and cheap credit to growing communities of Asian and Latin American immigrants. Now, as many of those bets have gone bad, interpreters are busier than ever helping the same banks try to coll

ect.

Dade Bulk Condo Opportunities Abound

Dade Bulk Condo Opportunities Abound

Bulk purchases in the local residential condominium market, where inventory is believed to have ballooned to 40,000 units, have been few and far between thus far in 2009. However, plenty of opportunities to buy blocks of units exist that many investors simply aren’t aware of yet.

More than 200 condo and townhome projects are in Miami-Dade County with availability of at least 20 units, according to Miami-based CondoReports.com. The report draws a distinction between units built through 2007, before the perceived condo market crash, and those closing over the past 15 months.

The exact number of units in each block is a moving target because projects built in 2008 and this year’s first quarter are still closing out existing sales contracts, says Adam Cappel, CondoReports president. It is safe to assume that nearly every building that began closing last year will have a meaningful block of inventory remaining, he says.

Tampa Bay area apartment complexes see gloom but renters see deals

Tampa Bay area apartment complexes see gloom but renters see deals

Like gas stations undercutting each other to the tenth of a penny, the apartment complexes up and down Gunn Highway are bidding for business.

Marbrisa and nearby Lofton Place have been advertising $100 move-in specials. Across the street, St. James Crossing offers $99. And Lakes of Northdale, just south of Gaither High School, will move you in for a buck.

Like so many industries these days, the multifamily rental sector is hurting.

With the epidemic of home foreclosures in the Tampa Bay area, you might think more people would be moving into rental apartments. But even that flood of potential renters hasn’t compensated for the masses that have moved in with friends or relatives, doubled or tripled up in homes, or simply can’t find a job to pay for rent.