Who owns this condo? Experts smell fraud

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.

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.

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Judge rips foreclosure law firm chiefs Marshall Watson And Roy Diaz

Shannon Behnken, Tampa Tribune

St. Petersburg foreclosure court judge Pamela Campbell is fed up with foreclosure law firms’ errors and missed hearings.

So today, she ordered the heads of two major law firms that handle foreclosures on behalf of banks to show up in her Pinellas County courtroom to explain themselves.

It didn’t matter that they’re based in Ft. Lauderdale.

Roy Diaz, Of  Smith, Hiatt & Diaz and Marshall Watson, of the firm Marshall C. Watson both appeared before Judge Campbell, who asked them about problematic foreclosure documentation and reports of their firm sending homeowners to the wrong courthouse.

“Go to your basic roots of when you were in law school,” she said, chastising the lawyers.

This isn’t the first time the Marshall Watson firm has been in hot water. It settled an investigation in March with Florida Attorney General Pam Bondi.

Bondi accused the firm of routinely mishandling paperwork, and Watson agreed to pay $2 million to the state.

It’s also not the first time Watson appeared before Judge Campbell either. Last summer, he was here for the same reasons.

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Stern Whistleblower Claims Firm Falsified Military Checks For Chase

JPMorgan Chase vows to fix mistakes on military members

Kimberly Miller, Palm Beach Post

Banking powerhouse JPMorgan Chase made an extraordinary mea culpa to America’s military personnel Tuesday with promises to reduce home loan payments for struggling borrowers and end foreclosures on active-duty service members.

The actions, which include donating 1,000 homes to members of the military and veterans, come a week after bank leaders told a congressional committee they wrongly foreclosed on the homes of active-duty personnel who were exempt under the Servicemembers Civil Relief Act. The bank also told the House Veterans Affairs Committee that it unintentionally violated the act by charging armed forces personnel interest rates above 6 percent.

A Chase spokeswoman declined to comment Tuesday on whether any of the service members affected live in Florida.

“This company has a great history of honoring military and veterans, and the mistakes we made on military foreclosures are a painful aberration,” said Jamie Dimon, chairman and chief executive of JP­Morgan Chase . “We deeply apologize to our military customers and their families.”

According to testimony at the Feb. 9 committee meeting, Chase overcharged at least 4,500 service members and improperly foreclosed on 18 homes. About $2 million has been dedicated to paying back those who were overcharged. Chase said it will rescind the sales of homes that have not been resold and forgive the remaining mortgage debt.

Rep. Cliff Stearns, R-Ocala, a member of the House Veterans Affairs Committee, was not overly impressed by the actions.

“Considering that this financial institution received $25 billion in TARP funds, yet only paid out $2 million in funds for economic, punitive and pain and suffering damages to our veterans, one would wonder how fair they really were with our veterans,” Stearns said Tuesday. “These abuses could only be the tip of the iceberg.”

Stearns said as a result of last week’s House meeting he is requesting a study be conducted of industry practices by the Government Accountability Office.

Under the programs announced Tuesday, Chase will not foreclose on any deployed military personnel.

Internal breakdowns at Chase were blamed for the problems, but leaders also said during the committee meeting that it could be an industrywide issue.

In Florida, beyond a bank’s internal checks, military status should be determined when a foreclosure summons is served. A non-military affidavit is supposed to be filed with the courts before a default judgment can be entered.

But a former employee of the Law Offices of David J. Stern told investigators from the Florida attorney general’s office that military checks were sometimes falsified.

The former employee, Tammie Lou Kapusta, said she was fired two weeks after she refused to fake the military checks.

Military borrowers with questions about a Chase loan can call (877) 469-0110 for mortgage questions or go to www.chasemilitary.com .

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Foreclosure Filings In Florida Plunge 42%

Kimberly Miller, Palm Beach Post

Foreclosure filings plummeted in November, showing the biggest declines nationwide since 2005 as the robo-signing fracas forced lenders to pause and review flawed or possibly fraudulent paperwork.

The nationwide drop of 21 percent in overall activity from October, as reported Wednesday by the real estate analysis company RealtyTrac, was mirrored in Florida, which saw November foreclosures fall 42 percent from the previous month.

In Palm Beach County, November foreclosure filings – initial defaults, sale notice and bank repossessions – plummeted 55 percent compared to October.

The declines came as no surprise following the temporary moratoriums placed by banks on foreclosures earlier this fall. November and December are also traditionally slower months as some lenders give troubled homeowners a break for the holidays.

But the delays won’t last forever, and foreclosure defense attorneys said they expect to see home takeovers increase once again in January with banks revving up their foreclosure machines to make up for lost time.

“Many of the lenders have dusted off the robo-signer issue as a mere technicality,” said foreclosure and bankruptcy defense attorney Donald Tiller of the Palm Beach Gardens-based Tiller Law. “But I know that lenders have now moved forward in many cases, so look for January and maybe December to show increases.”

The most dramatic declines in foreclosure filings in Florida came in the form of initial defaults and notices of foreclosure sales. An initial default is the first document filed by the lender notifying the owner of a foreclosure proceeding. Sale notices are issued after a final foreclosure judgment is entered and an auction date is set.

Statewide, sale notices fell 46 percent from October. In Palm Beach County, they fell 87 percent.

Initial defaults fell 52 percent statewide in November from the previous month, with Palm Beach County’s defaults dropping 46 percent.

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