Fla. Mortgage Fraud Monolith: Building Had Most Bad Deals
Although there has been an explosion of mortgage foreclosures throughout the country during the past year, one 43-story building in Miami’s international banking district is at what could be considered ground zero in this real estate debacle.
It is, reports Reuters, perhaps the most mortgage fraud-riddled residential building in the country’s most mortgage fraud-laden state.
“Florida leads the nation when it comes to mortgage fraud, according to the Virginia-based Mortgage Asset Research Institute, a group that works closely with the U.S. Mortgage Bankers Association,” the British news agency writes. And, with more than 200 condominiums that appear to have been obtained through shady schemes such as straw-buyer scams arranged by “a cartel of inside players” that have, at least elsewhere, included lawyers, the 643-unit Club at Brickell may be its most fraud-riddled. Without question, the building has “the highest current number of foreclosure proceedings involving any single south Florida property,” Reuters says.
Dubious transactions that should have raised red flags for mortgage lenders include condominiums that didn’t sell for months when listed at $450,000 and were withdrawn from the market. Then they subsequently sold for over $800,000, apparently with correspondingly high mortgages.
Although Florida had a disproportionate number of such sales, back before the subprime debt bomb detonated and mortgage lenders were still an easy source of money, the same problem is happening throughout the country, says Ken Thomas, a Miami-based banking expert who lectures at the Wharton School of the University of Pennsylvania. “We’re going to see a lot more of this fraud being exposed, especially as these units go into foreclosure.”
