Four years after the collapse of the U.S. housing bubble, flipping homes is back in fashion.
Jon Mirmelli, a Phoenix real-estate investor, learned late on the morning of Sept. 28 that a never-occupied custom house on the northern fringes of Scottsdale, Ariz., was going up for auction around noon the same day. The six-bedroom home, built on a three-acre desert plot, has a kitchen with two dishwashers, four ovens, "antibacterial" copper sinks, and a master "spa" bathroom with space for a flat-screen TV visible from the tub.
The minimum bid, as set by a unit of Citigroup Inc., which had a $1.3 million mortgage on the home, was $379,900. After several minutes of bidding among investors and their representatives, some wearing shorts and flip-flops, Mirmelli won the home for $486,300. A week later, he agreed to sell it for $690,000 to a woman who moved in this month.
During the housing boom, millions of Americans tried to make money by buying and then quickly reselling new houses and condominiums. That kind of flipping stopped several years ago, as home sales stalled amid a surge in foreclosures and curtailed lending. Now, a different breed of flipper is proliferating: one who seeks bargains at foreclosure auctions. Unlike the boom-time flippers, the latest generation needs cold cash, lots of local-market knowledge and strong nerves.
In the states where home prices have fallen the most, many local real-estate markets are dominated by foreclosed property, dragging down the value of neighboring homes. Barclays Capital estimates that banks and mortgage investors have 639,000 foreclosed homes for sale across the U.S., largely concentrated in Florida, California, Arizona and Nevada. That's equivalent to more than 10% of expected U.S. home sales this year.
Flippers swoop in at public auctions of foreclosed homes, known as trustee or sheriff sales. In many states, the lender sets the minimum bid, and takes possession of the property only if no one bids more. In the past, the minimum generally was about equal to the mortgage balance due. But in today's market, in which the value of many homes has dropped far below the loan balance, lenders wouldn't attract investors if they set the minimum at that level.
So lenders, or the loan-servicing firms that represent banks and investors, are increasingly likely to set the minimum much lower. Their goal is to tempt others to buy the house and spare banks the headaches and costs that come with taking possession. Many of the bidders are regulars at the sale, bidding for themselves or on behalf of investor clients (STRAW BUYERS). "We're all kind of like a little dysfunctional family," says Steve Mutsaers, a representative of PostedProperties, who was wearing black sunglasses, a white polo shirt and gray plaid shorts.
During the summer, Mutsaers says, he wears a sombrero to cope with temperatures well above 100 degrees. In Miami, a group of investors led by Oded M. Kaiser recently bought a condo at auction for $170,000. Two weeks later, they flipped it for $330,000. The loan balance was about $466,000. A spokeswoman for Litton Loan Servicing, which handled the sale on behalf of mortgage investors, declined to comment, more from this source............
August 27, 2009 - Posted by pibillwarner....David J. Stern Law Offices “CASH IN ON FORECLOSURES” With Sewer Service and Bid Rigging on Homes Sold on The Court House Steps, FBI Needs to Investigate.
To determine which law firms are filing the most foreclosures, the Tampa Tribune analyzed 1,734 lis pendens documents filed in Hillsborough County’s circuit civil and county civil court divisions.The Law Offices of Daniel J. Stern of Plantation filed at least 263 foreclosure suits in Tampa, a lawyer in Stern’s office declined comment, saying the firm’s financial service clients (Deutsche Bank ) request that Stern not speak with the media.
Daniel J. Stern has reason to not speak to the Media, a search of Public Records in the Broward County Clerk’s Office located several cases were David J. Stern or his law offices is listed as the Defendant in Lawsuits;LAW OFFICES OF DAVID J. STERN and DAVID J. STERN as an individual. Filing Date: 08/15/2008, Broward County Case Number: CACE 08 038170 CONTRACT INDEBTEDNESSSECURITY NATIONAL SERVICING CORP vs LAW OFFICE OF DAVID J. STERN 4th DCA CASE NO.: 4D04-776 Legal malpractice action against the Law Offices of David J. Stern (“Stern”).
A ex-employee of the Law Offices of David J. Stern of Plantation has contacted me, Bill Warner, in response to the article I posted on Monday, May 18, 2009, that followed up on the Tampa Tribune article of April 2008, (see above), it appears that what I had claimed about “sewer service” by Pro Vest LLC in Tampa Fl (working for the Stern law office) is just the tip of the iceberg.
It appears from this ex-employee of the Law Offices of David J. Stern of Plantation that Pro Vest, the process service company in Tampa, also had an office in the same building as the Law Offices of David J. Stern in Plantation and that “sewer service’ was done all the time and if needed Provest would pre-date the service of summons to make it appear that you had already been served and allow Stern to put your foreclosure case on a “rocket docket’ to get the house up for sale on the Court House steps (David J. Stern Law Office appears to have severed ties to Pro Vest).
Then the sales girls in the Stern office (a lot of the associate attorneys at the Stern Law firm have real estate licenses) would contact outside buyers and inform them of the exact time and date of the “court house steps sale” and tell the outside buyers what the correct amount to bid that would be approved by the bank and the court,(this is ”bid rigging”).
A recent hire by the Law office of David J. Stern is Attorney Vivien Leora Lurlene who also has a Real Estate Sales License in the State of Florida, I have no knowledge of her involvement in the ”bid rigging”or any other illegal activity at the Law Office of David J. Stern. These outside buyers contacted by the sales girls at the Stern Law office would resell these super low bargain houses purchaed on the Court House Steps for a profit and pay off the sales girls in the Stern Law office for the tip.
It appears from this ex-employee of the Law Offices of David J. Stern of Plantation that she was told to make up false documents for Freddie Mac and Fannie Mae when they came around to check their Foreclosure files, she was also instructed to lie to the banks when they requested a chronology report which is the foreclosure time-line on a file, there appears to be Federal violations that would necessitate an FBI investigation, the ex-employee is afraid to talk.
The federal takeover of Fannie Mae and Freddie Mac refers to the placing into conservatorship of government sponsored enterprises Fannie Mae and Freddie Mac by the U.S. Treasury in September 2008. It was one financial event among many in the ongoing subprime mortgage crisis.
Allegations of False “Sewer Service” Filed in Foreclosure of John J. Krondes by Law Firm of David J. Stern & Provest LLC of Tampa, FBI Needs to Investigate. The forever pile of complaints, lawsuits and legal malpractice cases just seems to have no end with the Law Firm of David J. Stern. The lawsuit of Connecticut man John J. Krondes filed on May 5th 2009, sheds light on a practice of falsifying “served papers” by the process servers linked to the David J. Stern Law Firm, this really puts the foreclosure complaint on a ‘Rocket Docket” with super speed to closing the case without the knowledge of the home owner.
Mr. Krondes alleges in his lawsuit that the Law Firm of David J. Stern Plantation Fl and ProVest LLC (provides service of legal process) Tampa Fl conspired to file fraudulent documentation of untrue “Affidavits of Service” a misrepresentation that John J. Kondres had been served in the Foreclosure Complaint of the Law firm of David J. Stern with the intent to deceive and mislead the Civil Court in Port St Lucie Fl where Mr. Kondres has/had his condo.
This is not the first time I have heard of home owners in Florida becoming aware of a Foreclosure Complaint filed on their property that has already gone before the Judge, without their knowledge, and the Law firm of David J. Stern has obtained a judgment against them and their home, usually it is a condo with an out of state owner, just like Mr. Kondres’s case.
In New York State, Attorney General Andrew Cuomo announced the arrest of the president of Long Island-based American Legal Process (William Singler) for engaging in a fraudulent business scheme in which the company allegedly failed to provide proper legal notification to thousands of New Yorkers facing debt-related lawsuits (SEWER SERVICE), causing them unknowingly to default and have costly judgments entered against them without the chance to respond or defend themselves.
This process serving company was apparently hired by many high-volume debt collection law firms in New York to serve collection lawsuit papers. This usually consisted of a summons and complaint which notifies consumers that they are being sued. American Legal Process (ALP) often neglected to actually serve the papers as required by law, instead engaging in the highly illegal practice of “sewer service,” according to the charges. It also appears that the Attorney General may bring charges against other process service companies as well.
Mr. Krondes, in FLORIDA, is seeking from the Law Firm of David J. Stern and Attorney Karina Musella and others “money damages”, the Value of the condo $400,000, Interest, Punitive Damages, Emotional Damages, Attorney fees and on and on, 16 money items in all.
Bill Warner Director of CSPI..Covert Surveillance by Private Investigators at WBI Inc.