Monday, April 7, 2008

Island of Disenchantment

Update to add link to (UN)real estate blog post:

(UN)real estate

Feel free to comment on the (UN)real estate blog. I particularly like the third post.

Foreclosures leave Clearwater's Island Estates residents disenchanted

By James Thorner
Times Staff Writer
Published Friday, April 4, 2008 5:11 PM

In a cobalt blue Bentley that he bragged once belonged to boxer Mike Tyson, Marty Donovan looked the part of a superstar real estate agent.

And he was. The Chicago native racked up dozens of home sales between 2004 and 2007, most in a single neighborhood, Clearwater's Island Estates. His $40-million in annual sales placed him at the top of heap.

Full Story Here

St. Petersburg appraiser Frank Gregoire, until recently chairman of the Florida Real Estate Appraisal Board, said the sales bear the hallmarks of a common scam.

Buyers find a compliant appraiser to justify a higher loan amount from the bank, pay the seller a lesser amount, stop making house payments and walk away with the extra cash.

More sophisticated operators make payments for several months before they quit the property, Gregoire said. That way it looks like they were honest buyers but simply fell on financial hard times.

"Some thief sticks up a bank and gets $10,000 and the FBI will pursue him like he's the scourge of the earth," Gregoire said. "Other guys use real estate to take a bank for hundreds of thousands or tens of millions of dollars. I wish they were pursued with the same zeal.
Not mentioned in the article are my comments about the effect of fraudulent, cash back transactions on assessed values. Neither did Thorner address my contention that the Pinellas County Property Appraiser's office must use more diligence in verifying transactions and rate the fraudulent transfers as UNQUALIFIED.