Kimberly Miller, Palm Beach Post
The neatly kept Kensington condominiums, fronted by a fountain, guard house and regal name, hold on to a pretense of Wellington wealth.
But past the empty guard shack and through the long-broken electronic entry gates, bank notices are taped to abandoned units – scarlet letters of fiscal failure.
Experts suspect more – that the condominium conversion was a crucible for fraud, a case study in real estate’s rise and fall.
A Palm Beach Post investigation of the 167-unit complex found evidence of straw buyers, value manipulation and fabricated documents. Questionable transactions by a title company and lender with several Kensington deals can explain at least of part of the neighborhood’s staggering 73 percent foreclosure rate.
The investigation also found:
- Multiple sales so overpriced that the Palm Beach County Property Appraiser’s Office alerted the FBI, noting “red flags everywhere.”
- A closing statement with a faked 20 percent down payment.
- Multiple units sold to individual buyers, such as a Costco employee and a cabdriver, who couldn’t afford them.
- A South Florida title agency that despite mounting consumer complaints, a 2009 fraud judgment against it and suspension by its underwriter, escaped state discipline until December 2010. Choice Title of South Florida imploded on its own well before the state moved to shut it down. The company’s former president, who is still licensed in Florida, recently advertised for mortgage brokers and loan officers on her Facebook page.
- Bad loans awarded by a now defunct firm that had triple the default rate of comparable South Florida lenders when its license expired Jan. 1. Amerilend Mortgage’s founder and president Jose Rivero was an executive in a bankrupt mortgage company and got his start as a loan officer with the infamous subprime lender Ameriquest. He has a mortgage broker application pending with the state.
Today, just 22 owners of Kensington units live in their condos.
The Kensington and the housing boom
Back in 2005, the Kensington was just an apartment complex. But with housing booming, it was soon scooped up by developer Carmel Investment Group, which had landed a $27.4 million mortgage with the soon-to-flounder Corus Bank to convert the apartments to condos.
As real estate faltered, a prolific bulk buyer led by former Miami hoteliers appeared in late 2007 to rescue Carmel in what was dubbed a “sweetheart” deal for its unsold units.
