Miami Building Foreclosures just starting
It is no secret that The Club at Brickell Bay has a very high
number of condos that have gone into foreclosure and are now
bank-owned. There are also a significant number of condos that are in
preforeclosure that will probably share a similar fate in the months to
come. The Association is likely having difficulty meeting its monthly
expenditures as a result of the lost revenue from these foreclosed
units. How severe is the problem? Is a special assessment or an
increase in monthly maintenance fees right around the corner at The
Club at Brickell Bay? In a letter sent to tenants the building
management is unable to provide cable or Internet service to the
MIAMI (Reuters) - At first glance, the 43-story building in Miami’s international banking district seems little different from other high-rise condominiums overlooking the turquoise waters of Biscayne Bay.
But the 643-unit condo known as the Club at Brickell is a leader in mortgage foreclosures and it appears also to stand at ground zero in a blizzard of fraud that may lie behind many of the failed loans threatening to bury the U.S. property market.
America’s subprime mortgage crisis is partly due to predatory, or aggressive, lenders, hard-sell tactics by mortgage brokers and an easing of underwriting standards in the $10 trillion home-loan industry.
But fraud accounts for a sizable share of the bad bets on mortgages, according to many industry experts, and lenders may have been victimized as much as anyone else.
“The lenders are holding the bag now, that’s what we’re finding out,” said Glenn Theobald, head of a mortgage fraud task force formed in south Florida’s Miami-Dade County in September.
Mortgage scams involve a cartel of inside players — colluding property appraisers, real-estate brokers and accountants willing to draw up fake income statements and tax returns — who recruit people with good credit histories to serve as a decoy or “straw buyer” in a real-estate deal.
The conspirators inflate the price of the property, to get the biggest loan possible, pay the sellers the original price and then pocket the excess loan money as “cash back” at the closing of the deal.
The decoy buyer is paid off — often with just $5,000 — and the property is quickly abandoned to foreclosure, said Theobald, a senior official with the Miami-Dade Police Department.
“It’s an epidemic,” said Nancy Hogan, a veteran realtor and former head of the Florida Real Estate Commission.
“The cash back, the fraud for profit, is what has been so rampant,” she said.
The Club at Brickell has the highest current number of foreclosure proceedings involving any single south Florida property.
There may be other properties in the United States that hold the distinction of being riddled with more cases of apparent mortgage fraud than the Club.