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Owe taxes? That’s OK. Wayne County will still sell you foreclosed …

Wayne County doesn’t always enforce a law that forbids tax delinquents from buying properties at its tax foreclosure auctions, contributing to a cycle of speculation that perpetuates blight, a Bridge Magazine investigation has found.

The county’s failure to do simple due diligence on the 3,000-plus buyers at its annual auctions means some of the biggest bulk buyers are able to add more homes to their portfolios year after year without being current on taxes, despite a 2014 state law intended to end the practice.

“The law basically just says check this box if you’re willing to lie,” said Michele Oberholtzer, who leads tax foreclosure prevention efforts for the United Community Housing Coalition, a Detroit nonprofit. “It is inadequate in addressing abuse.”

Other counties, such as Oakland and Genesee, have safeguards to prevent delinquent owners from buying at tax auctions. But Wayne County, which has sold close to 150,000 parcels since 2002, has allowed investors to buy cheap homes, do no repairs, and avoid paying taxes until they are foreclosed again, Bridge found.

The foreclosures have fundamentally changed scores of Detroit blocks including Monte Vista Street on the city’s west side. Ten years ago, there were 22 homes on Cassandra Williams’ block. All but seven have been tax foreclosed, records show, and are now blighted or have been demolished.

Williams lives next door to a home that a bulk buyer bought a few years ago even though his company owed taxes. Now, the house is in squalor and is one of 6,000 properties for sale in the county’s online tax auction, which continues until the third week in October. Bidding starts at $500.

“I don’t like them selling all these properties to unknown people who never come out and who never do anything with it,” Williams said. “Now, nobody is going to want to buy that house.”

State law requires counties to foreclose and sell properties that are three years’ delinquent in taxes. Oakland County Treasurer Andy Meisner said the 1999 law did not “anticipate a housing and foreclosure crisis with this kind of volume.”

“The public auction simply doesn’t allow for a foolproof system of connecting that property with its highest and best use,” Meisner said.

“Instead, you might have somebody buying it and sitting on it or somebody buying it, giving it a can of spray paint, and finding a renter.”

Few buyers are barred

Wayne County Treasurer Eric Sabree said his office has made significant progress reforming the auction and improved outreach efforts to help owners avoid losing their homes.

The number of owner-occupied homes in tax foreclosure this year is 786, down from about 20,000 in 2014. Some 36,000 owners are on payment plans for back taxes, according to the county.

Sabree said “we check for the names and the company names” to prevent tax delinquents from bidding at auction. After the auction, the county checks backgrounds of buyers by matching their names with a database of delinquent taxes and blighted properties, Sabree said.

Buyers who owe taxes are sent notices to “to advise they must pay delinquent taxes in order to be provided with deeds,” Sabree wrote in an email. He acknowledged, though, that “very few” buyers have been barred because “most of them go and reorganize into other LLCs and other entities to avoid detection.”

Next year, the county is “looking into bringing temporary staff” to help with the checks, said Sabree, who was appointed treasurer last year after several years as a top deputy.

Using nothing more than simple Google searches and checks of county records, Bridge found that four of the five top buyers in the 2015 auction bought properties from the county auction last year while their taxes were delinquent.

Together, they bought more than 1,000 properties, and four of those buyers still owe taxes this year, county records show.

What’s more, a random search of 10 of the 126 buyers who bought 10 or more properties last year found that six owed taxes on homes they bought at previous auctions, while another four transferred properties to other companies or limited liability corporations that are now delinquent in taxes.

In most cases, Bridge’s online searches took less than 10 minutes apiece because buyers made little or no effort to conceal their identity, bidding or buying properties under corporate names that had long paper trails of delinquencies.

Critics say the lack of oversight has hurt, especially in Detroit, which is home to the vast majority of Wayne County’s foreclosures.

“The last two years I’ve seen some of the payment plans offered by the county make a big difference,” said Detroit City Councilwoman Mary Sheffield. “But the damage is here. A lot of damage has been done.”

The majority of homes in Detroit are now occupied by renters, and advocates say the tax auction provides a continuous stock of homes for landlords.

“We are already seeing tenants being threatened with eviction from landlords who bought in the auction this year and don’t even have the deed to the property yet,” said Oberholtzer, the anti-foreclosure advocate.

‘It’s a mystery what goes on there’

Companies affiliated with Stevey Hagerman have acquired about 1,000 homes in Detroit through the tax auction. One of those firms, Detroit Motor City Fund LLC, bought 106 properties out of auction in 2015 for $221,189, records show.

The delinquent tax bill for those properties is now nearly $37,000, according to county records.

Even so, Hagerman’s companies picked up 287 properties, the records show. And this year?

“We are going big, if not bigger. (We) just picked up another 135 (properties,)” said Hagerman, who works as regional manager of a real estate investment firm, Brick Home Management. His father, Stephen Hagerman, is the firm’s CEO.

Stevey Hagerman contends his company stays up to date on taxes – and properties that are delinquent are usually because the occupant has a land contract. That makes tenants responsible for the property, Hagerman said.

When Hagerman first spoke to Bridge last month, he said he had never been challenged on any outstanding taxes or had to explain the company’s debt.

“It’s a mystery what goes on there,” he said, referring to Wayne County.

After Bridge inquired about the debts to the county, however, Hagerman this week said the county demanded payment for back taxes.

“Just this past week or so they are now claiming it’s a state law that if a bidder has any back taxes then they must pay those in full to receive deeds for winning bids this year,” Hagerman wrote in an email.

“This is a group of investors that are completely separate from previous years. So now I have to explain to them we can’t get deeds to properties because there are back taxes attached to my name.”

‘Nobody is going to want to buy that house’

On Detroit’s west side, Williams lives next door to a house the Hagermans bought in 2014’s tax auction for $500. Taxes were never paid, so it was foreclosed and again is for sale at the county’s ongoing auction.

The home has been empty since 2014 except for occasional squatters, Williams said. Trash is spilling out of the unlocked front door and into the yard.

Williams and the block club she leads mowed the grass and shoveled the snow at the home until last year. That’s when she got fed up and tracked down the owner.

Steve Hagerman responded with a letter in October of last year .

“I no longer own that property” the letter reads. “Wayne County took the home back for redemption. Please contact Wayne County about the home from here on out.”

The letter does not mention that the county “took the home back” because Hagerman did not pay taxes.

“Unfortunately, once or twice a year mistakes are made in the auction,” Stevey Hagerman told Bridge.

The other house next to Williams is empty and boarded as well. It was transferred to the county by the Detroit Land Bank after three mortgage companies swapped in the subprime scams of the 2000s and didn’t pay taxes.

She said she tries to maintain her property and feels let down by government.

“Both the city and county need to step up,” Williams said.

Other counties have safeguards

Stepped-up enforcement might be complicated by the size of Wayne County’s auction, which is the largest in the state and, by some accounts, the nation. In 2015, for instance, 36,812 properties were up for auction.

In Oakland County, Meisner said his office auctions nearly 500 parcels per year, and employs a “trust but verify” approach to auction buyers to “level the playing field for family purchasers and principal resident purchasers against the speculators.”

Meisner said his auction is conducted in person, rather than online, to prevent abuse. He also bars those who have faced tax foreclosure and checks to see whether bidders owe taxes or face ordinance violations for not maintaining their properties.

In Genesee County, Treasurer Deb Cherry said her office won’t finalize auction sales until after buyers have been checked for back taxes.

“We really don’t have an issue with people who owe taxes bidding again in our auction. Because we check,” said Cherry, whose auction also sells about 500 properties.

The system is essentially the same that Wayne County says it is using. Cherry acknowledged its limitations.

“There are probably ways around it, and we can only check (taxes) for our county,” Cherry said. “We have no idea whether or not somebody buying here owes somewhere else.”

In Wayne County, Sabree said buyers often use a maze of companies and corporations to cover their tracks.

The fifth-biggest buyer in Wayne County’s 2015 auction, for example, is an outfit called GPAM, LLC. It bought 101 properties for $138,611.

Using only county information, it would be virtually impossible to tell who owns the company. It isn’t registered in Michigan and lists its address as a “virtual office” firm in a Las Vegas office located on a road named “Painted Mirage.”

A tangle of far-flung records, though, shows Daniel Menake lists himself as managing member of GPAM on a quit claim deed transferring property to another company for which Menake is also listed as a managing member.

Menake is an investor based in New Jersey who sells Detroit real estate online. GPAM has sold most of the properties it bought in the 2015 auction, but all but one of the 19 that it still owns is tax delinquent, records show. The bill for his properties is at least $35,964.

In last year’s tax auction, an entity called Detroit Asset Liquidation, LLC, bought 110 properties. The Florida company lists Menake as its manager.

Developer Herb Strather, who says “he’s done more deals than any Detroiter,” said Sabree has helped reform the auction and is responsive to concerns.

Strather said many investors buy too many properties and end up owing taxes – including himself.

“We still carry properties that have delinquent taxes,” he said.

Support for the Detroit Journalism Cooperative on Michigan Radio comes from the John S. and James L. Knight Foundation, the Ford Foundation and the Corporation for Public Broadcasting.

Article source: http://michiganradio.org/post/owe-taxes-s-ok-wayne-county-will-still-sell-you-foreclosed-homes

Owe taxes? That’s OK. Wayne County will still sell you foreclosed …

Wayne County doesn’t always enforce a law that forbids tax delinquents from buying properties at its tax foreclosure auctions, contributing to a cycle of speculation that perpetuates blight, a Bridge Magazine investigation has found.

The county’s failure to do simple due diligence on the 3,000-plus buyers at its annual auctions means some of the biggest bulk buyers are able to add more homes to their portfolios year after year without being current on taxes, despite a 2014 state law intended to end the practice.

“The law basically just says check this box if you’re willing to lie,” said Michele Oberholtzer, who leads tax foreclosure prevention efforts for the United Community Housing Coalition, a Detroit nonprofit. “It is inadequate in addressing abuse.”

Other counties, such as Oakland and Genesee, have safeguards to prevent delinquent owners from buying at tax auctions. But Wayne County, which has sold close to 150,000 parcels since 2002, has allowed investors to buy cheap homes, do no repairs, and avoid paying taxes until they are foreclosed again, Bridge found.

The foreclosures have fundamentally changed scores of Detroit blocks including Monte Vista Street on the city’s west side. Ten years ago, there were 22 homes on Cassandra Williams’ block. All but seven have been tax foreclosed, records show, and are now blighted or have been demolished.

Williams lives next door to a home that a bulk buyer bought a few years ago even though his company owed taxes. Now, the house is in squalor and is one of 6,000 properties for sale in the county’s online tax auction, which continues until the third week in October. Bidding starts at $500.

“I don’t like them selling all these properties to unknown people who never come out and who never do anything with it,” Williams said. “Now, nobody is going to want to buy that house.”

State law requires counties to foreclose and sell properties that are three years’ delinquent in taxes. Oakland County Treasurer Andy Meisner said the 1999 law did not “anticipate a housing and foreclosure crisis with this kind of volume.”

“The public auction simply doesn’t allow for a foolproof system of connecting that property with its highest and best use,” Meisner said.

“Instead, you might have somebody buying it and sitting on it or somebody buying it, giving it a can of spray paint, and finding a renter.”

Few buyers are barred

Wayne County Treasurer Eric Sabree said his office has made significant progress reforming the auction and improved outreach efforts to help owners avoid losing their homes.

The number of owner-occupied homes in tax foreclosure this year is 786, down from about 20,000 in 2014. Some 36,000 owners are on payment plans for back taxes, according to the county.

Sabree said “we check for the names and the company names” to prevent tax delinquents from bidding at auction. After the auction, the county checks backgrounds of buyers by matching their names with a database of delinquent taxes and blighted properties, Sabree said.

Buyers who owe taxes are sent notices to “to advise they must pay delinquent taxes in order to be provided with deeds,” Sabree wrote in an email. He acknowledged, though, that “very few” buyers have been barred because “most of them go and reorganize into other LLCs and other entities to avoid detection.”

Next year, the county is “looking into bringing temporary staff” to help with the checks, said Sabree, who was appointed treasurer last year after several years as a top deputy.

Using nothing more than simple Google searches and checks of county records, Bridge found that four of the five top buyers in the 2015 auction bought properties from the county auction last year while their taxes were delinquent.

Together, they bought more than 1,000 properties, and four of those buyers still owe taxes this year, county records show.

What’s more, a random search of 10 of the 126 buyers who bought 10 or more properties last year found that six owed taxes on homes they bought at previous auctions, while another four transferred properties to other companies or limited liability corporations that are now delinquent in taxes.

In most cases, Bridge’s online searches took less than 10 minutes apiece because buyers made little or no effort to conceal their identity, bidding or buying properties under corporate names that had long paper trails of delinquencies.

Critics say the lack of oversight has hurt, especially in Detroit, which is home to the vast majority of Wayne County’s foreclosures.

“The last two years I’ve seen some of the payment plans offered by the county make a big difference,” said Detroit City Councilwoman Mary Sheffield. “But the damage is here. A lot of damage has been done.”

The majority of homes in Detroit are now occupied by renters, and advocates say the tax auction provides a continuous stock of homes for landlords.

“We are already seeing tenants being threatened with eviction from landlords who bought in the auction this year and don’t even have the deed to the property yet,” said Oberholtzer, the anti-foreclosure advocate.

‘It’s a mystery what goes on there’

Companies affiliated with Stevey Hagerman have acquired about 1,000 homes in Detroit through the tax auction. One of those firms, Detroit Motor City Fund LLC, bought 106 properties out of auction in 2015 for $221,189, records show.

The delinquent tax bill for those properties is now nearly $37,000, according to county records.

Even so, Hagerman’s companies picked up 287 properties, the records show. And this year?

“We are going big, if not bigger. (We) just picked up another 135 (properties,)” said Hagerman, who works as regional manager of a real estate investment firm, Brick Home Management. His father, Stephen Hagerman, is the firm’s CEO.

Stevey Hagerman contends his company stays up to date on taxes – and properties that are delinquent are usually because the occupant has a land contract. That makes tenants responsible for the property, Hagerman said.

When Hagerman first spoke to Bridge last month, he said he had never been challenged on any outstanding taxes or had to explain the company’s debt.

“It’s a mystery what goes on there,” he said, referring to Wayne County.

After Bridge inquired about the debts to the county, however, Hagerman this week said the county demanded payment for back taxes.

“Just this past week or so they are now claiming it’s a state law that if a bidder has any back taxes then they must pay those in full to receive deeds for winning bids this year,” Hagerman wrote in an email.

“This is a group of investors that are completely separate from previous years. So now I have to explain to them we can’t get deeds to properties because there are back taxes attached to my name.”

‘Nobody is going to want to buy that house’

On Detroit’s west side, Williams lives next door to a house the Hagermans bought in 2014’s tax auction for $500. Taxes were never paid, so it was foreclosed and again is for sale at the county’s ongoing auction.

The home has been empty since 2014 except for occasional squatters, Williams said. Trash is spilling out of the unlocked front door and into the yard.

Williams and the block club she leads mowed the grass and shoveled the snow at the home until last year. That’s when she got fed up and tracked down the owner.

Steve Hagerman responded with a letter in October of last year .

“I no longer own that property” the letter reads. “Wayne County took the home back for redemption. Please contact Wayne County about the home from here on out.”

The letter does not mention that the county “took the home back” because Hagerman did not pay taxes.

“Unfortunately, once or twice a year mistakes are made in the auction,” Stevey Hagerman told Bridge.

The other house next to Williams is empty and boarded as well. It was transferred to the county by the Detroit Land Bank after three mortgage companies swapped in the subprime scams of the 2000s and didn’t pay taxes.

She said she tries to maintain her property and feels let down by government.

“Both the city and county need to step up,” Williams said.

Other counties have safeguards

Stepped-up enforcement might be complicated by the size of Wayne County’s auction, which is the largest in the state and, by some accounts, the nation. In 2015, for instance, 36,812 properties were up for auction.

In Oakland County, Meisner said his office auctions nearly 500 parcels per year, and employs a “trust but verify” approach to auction buyers to “level the playing field for family purchasers and principal resident purchasers against the speculators.”

Meisner said his auction is conducted in person, rather than online, to prevent abuse. He also bars those who have faced tax foreclosure and checks to see whether bidders owe taxes or face ordinance violations for not maintaining their properties.

In Genesee County, Treasurer Deb Cherry said her office won’t finalize auction sales until after buyers have been checked for back taxes.

“We really don’t have an issue with people who owe taxes bidding again in our auction. Because we check,” said Cherry, whose auction also sells about 500 properties.

The system is essentially the same that Wayne County says it is using. Cherry acknowledged its limitations.

“There are probably ways around it, and we can only check (taxes) for our county,” Cherry said. “We have no idea whether or not somebody buying here owes somewhere else.”

In Wayne County, Sabree said buyers often use a maze of companies and corporations to cover their tracks.

The fifth-biggest buyer in Wayne County’s 2015 auction, for example, is an outfit called GPAM, LLC. It bought 101 properties for $138,611.

Using only county information, it would be virtually impossible to tell who owns the company. It isn’t registered in Michigan and lists its address as a “virtual office” firm in a Las Vegas office located on a road named “Painted Mirage.”

A tangle of far-flung records, though, shows Daniel Menake lists himself as managing member of GPAM on a quit claim deed transferring property to another company for which Menake is also listed as a managing member.

Menake is an investor based in New Jersey who sells Detroit real estate online. GPAM has sold most of the properties it bought in the 2015 auction, but all but one of the 19 that it still owns is tax delinquent, records show. The bill for his properties is at least $35,964.

In last year’s tax auction, an entity called Detroit Asset Liquidation, LLC, bought 110 properties. The Florida company lists Menake as its manager.

Developer Herb Strather, who says “he’s done more deals than any Detroiter,” said Sabree has helped reform the auction and is responsive to concerns.

Strather said many investors buy too many properties and end up owing taxes – including himself.

“We still carry properties that have delinquent taxes,” he said.

Support for the Detroit Journalism Cooperative on Michigan Radio comes from the John S. and James L. Knight Foundation, the Ford Foundation and the Corporation for Public Broadcasting.

Article source: http://michiganradio.org/post/owe-taxes-s-ok-wayne-county-will-still-sell-you-foreclosed-homes

Homeowners might have to start paying taxes on forgiven debt again

The Internal Revenue Service building in Washington DC. - Mark Wilson/Getty Images

It was 2007. The air was starting to leak out of the housing bubble. Home prices were beginning their free fall. 

“Many homeowners struggled to repay their mortgages, and were re-negotiating their mortgages with banks,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.

As part of those re-negotiations the banks sometimes forgave part of the debt for homeowners who had missed mortgage payments or were underwater and sold houses for less than what they owed on their mortgages. But the IRS saw that forgiven debt as income. Homeowners had to pay taxes on it, even though they no longer had a home.

“And it seems as if the IRS is hitting people when they’re down,” Rosenthal said.

So, to take the pressure off people who were already struggling through the recession, Congress passed the Mortgage Forgiveness Debt Relief Act in 2007.  It was supposed to expire after two years. But the recession dragged on. And lawmakers kept renewing it, helping millions of homeowners. Rosenthal estimates the Act would help a few million more if it were renewed. People like 49-year-old Fikirte Betru from Germantown, Maryland. She and her husband scraped by for years, to make their mortgage payments on time.

“We live from hand-to-mouth,” said Betru. “He work, we pay mortgage.”

Betru, an Ethiopian immigrant, said her husband was diagnosed with bone cancer two years ago, and couldn’t work. He was a truck driver.  They fell behind on their mortgage payments. To avoid foreclosure, they deeded the house back to the bank.  The bank forgave around $150,000 of their debt.  If the Mortgage Forgiveness Debt Relief Act isn’t extended, they’ll owe around $20,000 in taxes.

“I don’t think it’s right if you give forgiveness and then, on the other hand you say, you have to pay,” Betru said.

Consumer groups are lobbying to keep the Act alive, but it’s tough going. For starters, they have to get lawmakers’ attention.

“A lot of people are saying we know, it’s on the list,” said Marceline White, executive director of the Maryland Consumer Rights Coalition.

She says getting an extension is usually pretty routine. But this year?  Everybody’s preoccupied.

“There are lots of issues just in the past month that have come up, between the hurricanes and immigrant rights,” she said.

And White said a lot of people think the housing crisis is over, but it’s far from over in many parts of the country, like in Germantown, Maryland, where close to 10 percent of homeowners are still underwater.  

Article source: https://www.marketplace.org/2017/10/09/economy/tax-extenders-and-mortgage-crisis

Homeowners might have to start paying taxes on forgiven debt again

The Internal Revenue Service building in Washington DC. - Mark Wilson/Getty Images

It was 2007. The air was starting to leak out of the housing bubble. Home prices were beginning their free fall. 

“Many homeowners struggled to repay their mortgages, and were re-negotiating their mortgages with banks,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.

As part of those re-negotiations the banks sometimes forgave part of the debt for homeowners who had missed mortgage payments or were underwater and sold houses for less than what they owed on their mortgages. But the IRS saw that forgiven debt as income. Homeowners had to pay taxes on it, even though they no longer had a home.

“And it seems as if the IRS is hitting people when they’re down,” Rosenthal said.

So, to take the pressure off people who were already struggling through the recession, Congress passed the Mortgage Forgiveness Debt Relief Act in 2007.  It was supposed to expire after two years. But the recession dragged on. And lawmakers kept renewing it, helping millions of homeowners. Rosenthal estimates the Act would help a few million more if it were renewed. People like 49-year-old Fikirte Betru from Germantown, Maryland. She and her husband scraped by for years, to make their mortgage payments on time.

“We live from hand-to-mouth,” said Betru. “He work, we pay mortgage.”

Betru, an Ethiopian immigrant, said her husband was diagnosed with bone cancer two years ago, and couldn’t work. He was a truck driver.  They fell behind on their mortgage payments. To avoid foreclosure, they deeded the house back to the bank.  The bank forgave around $150,000 of their debt.  If the Mortgage Forgiveness Debt Relief Act isn’t extended, they’ll owe around $20,000 in taxes.

“I don’t think it’s right if you give forgiveness and then, on the other hand you say, you have to pay,” Betru said.

Consumer groups are lobbying to keep the Act alive, but it’s tough going. For starters, they have to get lawmakers’ attention.

“A lot of people are saying we know, it’s on the list,” said Marceline White, executive director of the Maryland Consumer Rights Coalition.

She says getting an extension is usually pretty routine. But this year?  Everybody’s preoccupied.

“There are lots of issues just in the past month that have come up, between the hurricanes and immigrant rights,” she said.

And White said a lot of people think the housing crisis is over, but it’s far from over in many parts of the country, like in Germantown, Maryland, where close to 10 percent of homeowners are still underwater.  

Article source: https://www.marketplace.org/2017/10/09/economy/tax-extenders-and-mortgage-crisis

AG Pam Bondi: Time to shut down Tampa duo preying on troubled …

TAMPA — During the foreclosure crisis, a lot of investors made a lot of money off the misfortune of others. But few were as prolific as Jimmy Dean Chancey and his nephew, Michael Chancey.

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Through a myriad of companies, the duo has acquired scores of houses in the Tampa Bay and Jacksonville areas for as little as $10 apiece. They got some at foreclosure auctions, others directly from desperate homeowners like Tarsha Santiago of Gibsonton.

“She said they knocked on her door more than once, and she was facing a number of things that were weighing on her mind plus facing foreclosure,” said lawyer Pamela Jo Hatley, who later represented Santiago. “They kept coming by and telling her they could help her with an attorney, they would help her avoid foreclosure, she could stay in her home and they talked her into doing this deal with them.”

In exchange for a few hundred dollars, Santiago deeded her four-bedroom, two-bath house to a company connected to the Chanceys.

PREVIOUS COVERAGE: Sadie Daiquiri and other phony foreclosure auction bidders are profitable ploy for Tampa compan

More than a year after it began investigating the pair, prompted by stories in the Tampa Bay Times and on a Jacksonville TV station, the office of Florida Attorney General Pam Bondi is trying to put the Chanceys permanently out of business. In a complaint filed this month in Hillsborough County Circuit Court, Bondi’s office accuses the two of “unfair and deceptive trade practices” that include deliberately misleading homeowners and renting out houses without disclosing they are in foreclosure.

“The defendants have (operated) through an interrelated network of companies that have common ownership, office managers, business functions, business locations and employees, that commingled funds and that engaged in a common scheme,” the complaint says.

Jimmy Chancey, 63, did not return calls or an email seeking comment. Michael Chancey, 55, did not return calls.

The Chanceys began acquiring houses several years ago, initially through homeowners association foreclosure auctions. When an owner fails to pay association dues, the HOA can put a lien on the house and foreclose. Whoever bids the highest amount that covers delinquent dues and other costs gets title to the property and can rent it out until the bank forecloses and the property is sold.

From 2011 to 2013, investors like the Chanceys often got title to expensive homes for just a few thousand dollars. But as more and more people began bidding at HOA auctions, driving up prices, the Chanceys tried a new approach — going straight to the homeowner.

“They prey upon people who are facing dire financial difficulties,” Hatley said, “and from what my client told me, they were actually going door to door in her community and knocking on houses. They did their research and found which homeowners were facing foreclosure. They would always give homeowners some piddling amount and tell the homeowner all they have to do is sign a quitclaim deed and the whole (foreclosure) thing would go away.”

In reality, it would not go away. The borrower would still be responsible for the mortgage and could face a potential deficiency judgment if the bank couldn’t sell the house for the amount owed.

Homeowners “don’t realize this because this outfit tells them a lie,” Hatley said of Chancey-connected businesses.

PREVIOUS COVERAGE: Real estate investors beat the banks to profit on foreclosures

Among the defendants named in the attorney general’s complaint is HOA Problem Solutions, started by Michael Chancey in 2013 and operated by Jimmy Chancey. Records show that the company often approached homeowners shortly after a foreclosure sale date was set and got them to sign a quitclaim deed.

Then, the company would try to delay the sale.

“Any successful HOA foreclosure sale prevents (the Chanceys) from successfully renting the properties on a long-term basis because once a property is sold, ownership changes hands and there is no legal basis for continuing to collect rents,” the complaint says.

First, lawyers for the Chanceys would file motions to help drag out the foreclosure proceedings. Then, if the property went to auction, an agent for the Chanceys would bid up the price. If the agent was the high bidder, he or she wouldn’t pay, forcing the sale to be rescheduled and enabling HOA Problem Solutions to keep collecting rent.

As the Times has reported, the high bidders on several houses linked to the company registered under the phony names Sadie Daquiri, Tori Bleigh and Jeff Stamkos. In each case, they failed to pay, and HOA Problem Solutions retained title to the property.

Tenants, meanwhile, were often left in the dark about pending foreclosures.

In a story last year, WJXT-TV spotlighted the plight of Army Specialist James McCollum who returned to Jacksonville after two tours in Iraq and rented a house he found online. He had paid a total of more than $15,000 in rent to RHMG Inc.— one of Michael Chancey’s companies — when he discovered that the bank was foreclosing and that he, his wife and two daughters would have to find another place although they lived on a fixed income and could not afford to move.

“This is our home,” McCollum, who is disabled, told the station. “This is where we expected to be.”

In cases such as that, Bondi’s office says, the Chanceys and their companies “failed to disclose that the property was in foreclosure, failed to make payment on the mortgages as required by Florida statutes, applied rents received to (their) own use and caused tenants to incur expenses” including moving costs and security and utility deposits.

And because tenants are typically named as defendants in foreclosure suits, they also faced “harm to their credit scores,” the complaint adds.

The attorney general’s office wants the Chanceys, HOA Problem Solutions and others named in the complaint to pay up to $15,000 for each alleged violation of state law and to return rents, security deposits and properties acquired from distressed homeowners. The Chanceys should also be permanently barred from the residential real estate business, including any activities connected with homeowner association foreclosure auctions, the complaint says.

HOA Problem Solutions has taken down its web site and is no longer an active company in Florida, state records show.

“I can only assume they’re now laying low, or hopefully getting out of the scamming business entirely,” said Clearwater attorney Brandon Mullis, who has represented homeowners associations that tussled with the Chanceys “Maybe the circus packed up and left town.”

But while HOA Problem Solutions and three similarly named companies are technically out of business, HOA Problem Solutions 5 is still active. The companies still hold title to numerous houses in the Tampa Bay area and could rent them out until the banks foreclose.

Michael Chancey’s RHMG, also remains active, as does a new company, Bravo Home Management, that he started in April.

In its complaint, Bondi’s office tacitly acknowledges the difficulty of identifying all of the individuals and entities connected to the Chanceys that might have been involved in alleged violations of state law.

Beneficiaries of as many as 400 land trusts “are unknown to the Attorney General, who therefore sues them under these fictitious names,” the complaint says. “(The office) will amend this complaint to add their true name and capacities when they become known.”

As for the Tarsha Santiago, she was able to get her house back because her husband, a co-owner, had not signed the quitclaim deed. But Hatley, the Santiagos’ attorney, is skeptical that the attorney general’s suit will have much impact on stopping the Chanceys.

“I think the American people are creative in they how they make money,” she said, “and as you go down the food chain and get to these bottom feeders, if there’ s any opportunity to make money, they’re going to take it.”

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

Article source: http://www.tampabay.com/news/business/realestate/ag-pam-bondi-time-to-shut-down-tampa-duo-preying-on-troubled-homeowners/2340839

AG Pam Bondi: Time to shut down Tampa duo preying on troubled …

TAMPA — During the foreclosure crisis, a lot of investors made a lot of money off the misfortune of others. But few were as prolific as Jimmy Dean Chancey and his nephew, Michael Chancey.

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Through a myriad of companies, the duo has acquired scores of houses in the Tampa Bay and Jacksonville areas for as little as $10 apiece. They got some at foreclosure auctions, others directly from desperate homeowners like Tarsha Santiago of Gibsonton.

“She said they knocked on her door more than once, and she was facing a number of things that were weighing on her mind plus facing foreclosure,” said lawyer Pamela Jo Hatley, who later represented Santiago. “They kept coming by and telling her they could help her with an attorney, they would help her avoid foreclosure, she could stay in her home and they talked her into doing this deal with them.”

In exchange for a few hundred dollars, Santiago deeded her four-bedroom, two-bath house to a company connected to the Chanceys.

PREVIOUS COVERAGE: Sadie Daiquiri and other phony foreclosure auction bidders are profitable ploy for Tampa compan

More than a year after it began investigating the pair, prompted by stories in the Tampa Bay Times and on a Jacksonville TV station, the office of Florida Attorney General Pam Bondi is trying to put the Chanceys permanently out of business. In a complaint filed this month in Hillsborough County Circuit Court, Bondi’s office accuses the two of “unfair and deceptive trade practices” that include deliberately misleading homeowners and renting out houses without disclosing they are in foreclosure.

“The defendants have (operated) through an interrelated network of companies that have common ownership, office managers, business functions, business locations and employees, that commingled funds and that engaged in a common scheme,” the complaint says.

Jimmy Chancey, 63, did not return calls or an email seeking comment. Michael Chancey, 55, did not return calls.

The Chanceys began acquiring houses several years ago, initially through homeowners association foreclosure auctions. When an owner fails to pay association dues, the HOA can put a lien on the house and foreclose. Whoever bids the highest amount that covers delinquent dues and other costs gets title to the property and can rent it out until the bank forecloses and the property is sold.

From 2011 to 2013, investors like the Chanceys often got title to expensive homes for just a few thousand dollars. But as more and more people began bidding at HOA auctions, driving up prices, the Chanceys tried a new approach — going straight to the homeowner.

“They prey upon people who are facing dire financial difficulties,” Hatley said, “and from what my client told me, they were actually going door to door in her community and knocking on houses. They did their research and found which homeowners were facing foreclosure. They would always give homeowners some piddling amount and tell the homeowner all they have to do is sign a quitclaim deed and the whole (foreclosure) thing would go away.”

In reality, it would not go away. The borrower would still be responsible for the mortgage and could face a potential deficiency judgment if the bank couldn’t sell the house for the amount owed.

Homeowners “don’t realize this because this outfit tells them a lie,” Hatley said of Chancey-connected businesses.

PREVIOUS COVERAGE: Real estate investors beat the banks to profit on foreclosures

Among the defendants named in the attorney general’s complaint is HOA Problem Solutions, started by Michael Chancey in 2013 and operated by Jimmy Chancey. Records show that the company often approached homeowners shortly after a foreclosure sale date was set and got them to sign a quitclaim deed.

Then, the company would try to delay the sale.

“Any successful HOA foreclosure sale prevents (the Chanceys) from successfully renting the properties on a long-term basis because once a property is sold, ownership changes hands and there is no legal basis for continuing to collect rents,” the complaint says.

First, lawyers for the Chanceys would file motions to help drag out the foreclosure proceedings. Then, if the property went to auction, an agent for the Chanceys would bid up the price. If the agent was the high bidder, he or she wouldn’t pay, forcing the sale to be rescheduled and enabling HOA Problem Solutions to keep collecting rent.

As the Times has reported, the high bidders on several houses linked to the company registered under the phony names Sadie Daquiri, Tori Bleigh and Jeff Stamkos. In each case, they failed to pay, and HOA Problem Solutions retained title to the property.

Tenants, meanwhile, were often left in the dark about pending foreclosures.

In a story last year, WJXT-TV spotlighted the plight of Army Specialist James McCollum who returned to Jacksonville after two tours in Iraq and rented a house he found online. He had paid a total of more than $15,000 in rent to RHMG Inc.— one of Michael Chancey’s companies — when he discovered that the bank was foreclosing and that he, his wife and two daughters would have to find another place although they lived on a fixed income and could not afford to move.

“This is our home,” McCollum, who is disabled, told the station. “This is where we expected to be.”

In cases such as that, Bondi’s office says, the Chanceys and their companies “failed to disclose that the property was in foreclosure, failed to make payment on the mortgages as required by Florida statutes, applied rents received to (their) own use and caused tenants to incur expenses” including moving costs and security and utility deposits.

And because tenants are typically named as defendants in foreclosure suits, they also faced “harm to their credit scores,” the complaint adds.

The attorney general’s office wants the Chanceys, HOA Problem Solutions and others named in the complaint to pay up to $15,000 for each alleged violation of state law and to return rents, security deposits and properties acquired from distressed homeowners. The Chanceys should also be permanently barred from the residential real estate business, including any activities connected with homeowner association foreclosure auctions, the complaint says.

HOA Problem Solutions has taken down its web site and is no longer an active company in Florida, state records show.

“I can only assume they’re now laying low, or hopefully getting out of the scamming business entirely,” said Clearwater attorney Brandon Mullis, who has represented homeowners associations that tussled with the Chanceys “Maybe the circus packed up and left town.”

But while HOA Problem Solutions and three similarly named companies are technically out of business, HOA Problem Solutions 5 is still active. The companies still hold title to numerous houses in the Tampa Bay area and could rent them out until the banks foreclose.

Michael Chancey’s RHMG, also remains active, as does a new company, Bravo Home Management, that he started in April.

In its complaint, Bondi’s office tacitly acknowledges the difficulty of identifying all of the individuals and entities connected to the Chanceys that might have been involved in alleged violations of state law.

Beneficiaries of as many as 400 land trusts “are unknown to the Attorney General, who therefore sues them under these fictitious names,” the complaint says. “(The office) will amend this complaint to add their true name and capacities when they become known.”

As for the Tarsha Santiago, she was able to get her house back because her husband, a co-owner, had not signed the quitclaim deed. But Hatley, the Santiagos’ attorney, is skeptical that the attorney general’s suit will have much impact on stopping the Chanceys.

“I think the American people are creative in they how they make money,” she said, “and as you go down the food chain and get to these bottom feeders, if there’ s any opportunity to make money, they’re going to take it.”

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

Article source: http://www.tampabay.com/news/business/realestate/ag-pam-bondi-time-to-shut-down-tampa-duo-preying-on-troubled-homeowners/2340839

Foreclosure executed by Stokes

MORTGAGE FORECLOSURE SALE

 

Default having been made in the payment of the indebtedness secured by that certain mortgage executed by Glen E. Stokes and Carolyn W. Stokes, husband and wife, originally in favor of Mortgage Electronic Registration Systems, Inc., as nominee for CrossCountry Mortgage, Inc., on the 13th day of November, 2015, said mortgage recorded in the Office of the Judge of Probate of Lee County, Alabama, in Book 4176 Page 583; the undersigned Pingora Loan Servicing, LLC, as Mortgagee/Transferee, under and by virtue of the power of sale contained in said mortgage, will sell at public outcry to the highest bidder for cash, in front of the main entrance of the Courthouse at Opelika, Lee County, Alabama, on November 30, 2017, during the legal hours of sale, all of its right, title, and interest in and to the following described real estate, situated in Lee County, Alabama, to-wit:

 

Lot 7, 8, and 9, Block 4, Pine Knoll Subdivision, 4th Addition, according to and as shown by map or plat of said subdivision of record in Town Plat Book 6, at Page 162, in the Office of the Jude of Probate of Lee County, Alabama.

 

Property street address for informational purposes:  107 Pine Knoll Cir, Opelika, AL 36804

 

THIS PROPERTY WILL BE SOLD ON AN “AS IS, WHERE IS” BASIS, SUBJECT TO ANY EASEMENTS, ENCUMBRANCES, AND EXCEPTIONS REFLECTED IN THE MORTGAGE AND THOSE CONTAINED IN THE RECORDS OF THE OFFICE OF THE JUDGE OF PROBATE OF THE COUNTY WHERE THE ABOVE-DESCRIBED PROPERTY IS SITUATED.  THIS PROPERTY WILL BE SOLD WITHOUT WARRANTY OR RECOURSE, EXPRESSED OR IMPLIED AS TO TITLE, USE AND/OR ENJOYMENT AND WILL BE SOLD SUBJECT TO THE RIGHT OF REDEMPTION OF ALL PARTIES ENTITLED THERETO.

 

Alabama law gives some persons who have an interest in property the right to redeem the property under certain circumstances.  Programs may also exist that help persons avoid or delay the foreclosure process. An attorney should be consulted to help you understand these rights and programs as a part of the foreclosure process.

 

This sale is made for the purpose of paying the indebtedness secured by said mortgage, as well as the expenses of foreclosure.

 

The successful bidder must tender a non-refundable deposit of Five Thousand Dollars ($5,000.00) in certified funds made payable to Sirote Permutt, P.C. at the time and place of the sale. The balance of the purchase price must be paid in certified funds by noon the next business day at the Law Office of Sirote Permutt, P.C. at the address indicated below. Sirote Permutt, P.C. reserves the right to award the bid to the next highest bidder should the highest bidder fail to timely tender the total amount due.

 

The Mortgagee/Transferee reserves the right to bid for and purchase the real estate and to credit its purchase price against the expenses of sale and the indebtedness secured by the real estate.

 

This sale is subject to postponement or cancellation.

Pingora Loan Servicing, LLC, Mortgagee/Transferee

 

Rebecca Redmond

SIROTE PERMUTT, P.C.

P. O. Box 55727

Birmingham, AL  35255-5727

Attorney for Mortgagee/Transferee

www.sirote.com/foreclosures

421735

 

The Villager

October 12, October 19, October 26, 2017

Article source: http://www.auburnvillager.com/legals/foreclosure-executed-by-stokes/article_24440494-af57-11e7-b8bf-9b1ff8029cf3.html

Owe taxes? That’s OK. Wayne County will still sell you foreclosed homes.

Wayne County doesn’t always enforce a law that forbids tax delinquents from buying properties at its tax foreclosure auctions, contributing to a cycle of speculation that perpetuates blight, a Bridge Magazine investigation has found.

The county’s failure to do simple due diligence on the 3,000-plus buyers at its annual auctions means some of the biggest bulk buyers are able to add more homes to their portfolios year after year without being current on taxes, despite a 2014 state law intended to end the practice.

“The law basically just says check this box if you’re willing to lie,” said Michele Oberholtzer, who leads tax foreclosure prevention efforts for the United Community Housing Coalition, a Detroit nonprofit. “It is inadequate in addressing abuse.”

Other counties, such as Oakland and Genesee, have safeguards to prevent delinquent owners from buying at tax auctions. But Wayne County, which has sold close to 150,000 parcels since 2002, has allowed investors to buy cheap homes, do no repairs, and avoid paying taxes until they are foreclosed again, Bridge found.

The foreclosures have fundamentally changed scores of Detroit blocks including Monte Vista Street on the city’s west side. Ten years ago, there were 22 homes on Cassandra Williams’ block. All but seven have been tax foreclosed, records show, and are now blighted or have been demolished.

Williams lives next door to a home that a bulk buyer bought a few years ago even though his company owed taxes. Now, the house is in squalor and is one of 6,000 properties for sale in the county’s online tax auction, which continues until the third week in October. Bidding starts at $500.

“I don’t like them selling all these properties to unknown people who never come out and who never do anything with it,” Williams said. “Now, nobody is going to want to buy that house.”

State law requires counties to foreclose and sell properties that are three years’ delinquent in taxes. Oakland County Treasurer Andy Meisner said the 1999 law did not “anticipate a housing and foreclosure crisis with this kind of volume.”

“The public auction simply doesn’t allow for a foolproof system of connecting that property with its highest and best use,” Meisner said.

“Instead, you might have somebody buying it and sitting on it or somebody buying it, giving it a can of spray paint, and finding a renter.”

Few buyers are barred

Wayne County Treasurer Eric Sabree said his office has made significant progress reforming the auction and improved outreach efforts to help owners avoid losing their homes.

The number of owner-occupied homes in tax foreclosure this year is 786, down from about 20,000 in 2014. Some 36,000 owners are on payment plans for back taxes, according to the county.

Sabree said “we check for the names and the company names” to prevent tax delinquents from bidding at auction. After the auction, the county checks backgrounds of buyers by matching their names with a database of delinquent taxes and blighted properties, Sabree said.

Buyers who owe taxes are sent notices to “to advise they must pay delinquent taxes in order to be provided with deeds,” Sabree wrote in an email. He acknowledged, though, that “very few” buyers have been barred because “most of them go and reorganize into other LLCs and other entities to avoid detection.”

Next year, the county is “looking into bringing temporary staff” to help with the checks, said Sabree, who was appointed treasurer last year after several years as a top deputy.

Using nothing more than simple Google searches and checks of county records, Bridge found that four of the five top buyers in the 2015 auction bought properties from the county auction last year while their taxes were delinquent.

Together, they bought more than 1,000 properties, and four of those buyers still owe taxes this year, county records show.

What’s more, a random search of 10 of the 126 buyers who bought 10 or more properties last year found that six owed taxes on homes they bought at previous auctions, while another four transferred properties to other companies or limited liability corporations that are now delinquent in taxes.

In most cases, Bridge’s online searches took less than 10 minutes apiece because buyers made little or no effort to conceal their identity, bidding or buying properties under corporate names that had long paper trails of delinquencies.

Critics say the lack of oversight has hurt, especially in Detroit, which is home to the vast majority of Wayne County’s foreclosures.

“The last two years I’ve seen some of the payment plans offered by the county make a big difference,” said Detroit City Councilwoman Mary Sheffield. “But the damage is here. A lot of damage has been done.”

The majority of homes in Detroit are now occupied by renters, and advocates say the tax auction provides a continuous stock of homes for landlords.

“We are already seeing tenants being threatened with eviction from landlords who bought in the auction this year and don’t even have the deed to the property yet,” said Oberholtzer, the anti-foreclosure advocate.

‘It’s a mystery what goes on there’

Companies affiliated with Stevey Hagerman have acquired about 1,000 homes in Detroit through the tax auction. One of those firms, Detroit Motor City Fund LLC, bought 106 properties out of auction in 2015 for $221,189, records show.

The delinquent tax bill for those properties is now nearly $37,000, according to county records.

Even so, Hagerman’s companies picked up 287 properties, the records show. And this year?

“We are going big, if not bigger. (We) just picked up another 135 (properties,)” said Hagerman, who works as regional manager of a real estate investment firm, Brick Home Management. His father, Stephen Hagerman, is the firm’s CEO.

Stevey Hagerman contends his company stays up to date on taxes – and properties that are delinquent are usually because the occupant has a land contract. That makes tenants responsible for the property, Hagerman said.

When Hagerman first spoke to Bridge last month, he said he had never been challenged on any outstanding taxes or had to explain the company’s debt.

“It’s a mystery what goes on there,” he said, referring to Wayne County.

After Bridge inquired about the debts to the county, however, Hagerman this week said the county demanded payment for back taxes.

“Just this past week or so they are now claiming it’s a state law that if a bidder has any back taxes then they must pay those in full to receive deeds for winning bids this year,” Hagerman wrote in an email.

“This is a group of investors that are completely separate from previous years. So now I have to explain to them we can’t get deeds to properties because there are back taxes attached to my name.”

‘Nobody is going to want to buy that house’

On Detroit’s west side, Williams lives next door to a house the Hagermans bought in 2014’s tax auction for $500. Taxes were never paid, so it was foreclosed and again is for sale at the county’s ongoing auction.

The home has been empty since 2014 except for occasional squatters, Williams said. Trash is spilling out of the unlocked front door and into the yard.

Williams and the block club she leads mowed the grass and shoveled the snow at the home until last year. That’s when she got fed up and tracked down the owner.

Steve Hagerman responded with a letter in October of last year .

“I no longer own that property” the letter reads. “Wayne County took the home back for redemption. Please contact Wayne County about the home from here on out.”

The letter does not mention that the county “took the home back” because Hagerman did not pay taxes.

“Unfortunately, once or twice a year mistakes are made in the auction,” Stevey Hagerman told Bridge.

The other house next to Williams is empty and boarded as well. It was transferred to the county by the Detroit Land Bank after three mortgage companies swapped in the subprime scams of the 2000s and didn’t pay taxes.

She said she tries to maintain her property and feels let down by government.

“Both the city and county need to step up,” Williams said.

Other counties have safeguards

Stepped-up enforcement might be complicated by the size of Wayne County’s auction, which is the largest in the state and, by some accounts, the nation. In 2015, for instance, 36,812 properties were up for auction.

In Oakland County, Meisner said his office auctions nearly 500 parcels per year, and employs a “trust but verify” approach to auction buyers to “level the playing field for family purchasers and principal resident purchasers against the speculators.”

Meisner said his auction is conducted in person, rather than online, to prevent abuse. He also bars those who have faced tax foreclosure and checks to see whether bidders owe taxes or face ordinance violations for not maintaining their properties.

In Genesee County, Treasurer Deb Cherry said her office won’t finalize auction sales until after buyers have been checked for back taxes.

“We really don’t have an issue with people who owe taxes bidding again in our auction. Because we check,” said Cherry, whose auction also sells about 500 properties.

The system is essentially the same that Wayne County says it is using. Cherry acknowledged its limitations.

“There are probably ways around it, and we can only check (taxes) for our county,” Cherry said. “We have no idea whether or not somebody buying here owes somewhere else.”

In Wayne County, Sabree said buyers often use a maze of companies and corporations to cover their tracks.

The fifth-biggest buyer in Wayne County’s 2015 auction, for example, is an outfit called GPAM, LLC. It bought 101 properties for $138,611.

Using only county information, it would be virtually impossible to tell who owns the company. It isn’t registered in Michigan and lists its address as a “virtual office” firm in a Las Vegas office located on a road named “Painted Mirage.”

A tangle of far-flung records, though, shows Daniel Menake lists himself as managing member of GPAM on a quit claim deed transferring property to another company for which Menake is also listed as a managing member.

Menake is an investor based in New Jersey who sells Detroit real estate online. GPAM has sold most of the properties it bought in the 2015 auction, but all but one of the 19 that it still owns is tax delinquent, records show. The bill for his properties is at least $35,964.

In last year’s tax auction, an entity called Detroit Asset Liquidation, LLC, bought 110 properties. The Florida company lists Menake as its manager.

Developer Herb Strather, who says “he’s done more deals than any Detroiter,” said Sabree has helped reform the auction and is responsive to concerns.

Strather said many investors buy too many properties and end up owing taxes – including himself.

“We still carry properties that have delinquent taxes,” he said.

Support for the Detroit Journalism Cooperative on Michigan Radio comes from the John S. and James L. Knight Foundation, the Ford Foundation and the Corporation for Public Broadcasting.

Article source: http://michiganradio.org/post/owe-taxes-s-ok-wayne-county-will-still-sell-you-foreclosed-homes

A financial health fintech has partnered with Freddie Mac – Business …

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Freddie Mac, a US government agency that funds mortgages for lenders, has partnered EarnUp, a fintech that helps borrowers repay their loans on time.

Under the partnership, Freddie Mac will distribute EarnUp’s services to low-income consumers through three of its financial counseling partners, nonprofit organizations set up during the 2008 crash to help struggling borrowers avoid foreclosure. In the pilot, a select pool of consumers will be given free access to EarnUp for a year. 

EarnUp allows consumers to manage all of their loans via a single dashboard. Its technology automatically deducts small amounts from users’ paychecks that go toward repaying their loans to make sure they stay on top of their debts. EarnUp also generates personalized financial advice to help users better manage their loan repayments. Freddie Mac says that by first rolling out the service with a select group of consumers, the agency will be able to gain deeper insight into the needs of low-income borrowers, enabling it to later introduce more services for this group. This suggests the startup may share its data with the agency.

Working with nonprofit organizations seems like a good way for financial health fintechs to gain traction. Household debt in the US is continuing to rise, making it likely that delinquencies on all types of loans will start to increase in the near future. If this happens, a greater number of less-affluent borrowers would probably turn to financial counseling organizations for help. In turn, this would present a valuable opportunity for companies like EarnUp to boost awareness and distribution. As such, we may see other fintechs specializing in debt management seek similar distribution deals.

In an increasingly digital landscape, tech-savvy consumers are starting to demand simpler ways to take out mortgages, and legacy providers are suffering. In the US, the top three incumbent lenders together captured about 45% of the overall mortgage market in 2011; they hold just 24% in 2017.

But a new class of mortgage-focused startups have developed a range of business models to help incumbents update this valuable product for the digital age.

There are still some fundamental problems in the insurance market that present obstacles to innovation — for both startups and incumbents. But there are ways to overcome them while making mortgages more attractive for consumers and improving returns for lenders.

Maria Terekhova, research associate for BI Intelligence, Business Insider’s premium research service, has written a detailed report on the digital disruption of home loans that:

  • Examines the flaws in the mortgage status quo that are upsetting consumers and dampening returns for lenders.
  • Discusses why incumbent lenders can’t afford to delay innovating any longer around this product.
  • Outlines different ways mortgage fintechs are breathing new life into this product, including by helping incumbents.
  • Looks at some mortgage efforts already underway by incumbent lenders, and some considerations that should guide their projects.
  • Gives an overview of hurdles still standing in the way of large-scale change in the mortgage space, and how they can be overcome.

To get the full report, subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND more than 250 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. Learn More Now

You can also purchase and download the report from our research store.

Article source: http://www.businessinsider.com/financial-health-fintech-partners-freddie-mac-2017-10

New landlord in Sleepy Hollow pledges to spruce up downtown

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Billy Procida, president and CEO of Procida Funding Advisors, has become the owner of eight mixed use building in the village. He hopes to be at the forefront of a revitalization of parts of the village that he feels have been neglected.
Seth Harrison/lohud

SLEEPY HOLLOW – Juan Veloz didn’t miss a beat when he spotted his new landlord walking down Cortlandt Street one recent morning. 

Veloz, 41, speaking through his 11-year-old daughter Maria acting as an interpreter, told the landlord, William “Billy” Procida, about a malfunctioning bathroom light in his family apartment on the same street.  

“This is the first time we heard about it,” Procida responded to Veloz with a smile. “We’ll send somebody over there.” 

The Veloz family is among the apartment renters who recently became tenants of Procida, president of Procida Funding Advisors, a commercial real estate lender and advisory firm based in Englewood Cliffs, New Jersey. 

About six months ago, Procida became the owner of eight buildings in the Cortlandt Street neighborhood after the former owners — limited liability companies all owned by Cirilo Rodriguez of Sleepy Hollow — filed for bankruptcy. The buildings were subsequently auctioned off, and Procida, who was a main creditor of Rodriguez, bought the buildings. 

WILLIAM ‘BILLY’ PROCIDA: Donald Trump was my mentor

PROBE: Sleepy Hollow police investigate suspicious apartment fire

Procida, as a proprietor of the buildings that contain a total of 68 apartments and eight stores, has been improving his new portfolio, painting façades and installing new blinds on each apartment window. He also got to know his tenants by holding breakfast and dinner meetings.

“I made sure I shook hands with every tenant here,” he said. 

Private lender 

Procida, of Piermont, made his name in real estate as a contractor and developer in New York City, spearheading the revitalization effort of the Bronx and Harlem in the 1980s and 1990s. Around that time, he took one year leave of absence and worked for real estate mogul Donald Trump as his real-life apprentice. 

Procida’s focus in recent years has been lending money to developers and property owners who need non-traditional sources for capital. 

“We are a private lender. In fact, our company was just named as the number one non-bank lender in the country,” said Procida, referring to the 2016 award from Real Estate Finance Investment, an industry news and analytics website. “We do everything a bank does except we don’t take deposits.” 

In August 2015, Rodriguez took out a $9.5 million bridge-loan from Procida’s investment arm, The 100 Mile Fund, to avoid impending foreclosure, according to court papers filed by the fund’s attorney with the U.S. Bankruptcy Court. But in a couple of months, 100 Mile discovered a preexisting $1.785 million judgement against Rodriguez, which the fund argues was not disclosed when the $9.5 million loan was made. In early 2016, loan payments stalled, and Rodriguez filed for bankruptcy, according to the document. 

Janese Thompson, a Manhattan attorney representing Rodriquez, said her client had no comment, citing pending litigation, while declining to specify which case. According to Westchester County Clerk’s online records, Procida’s firm sued Rodriquez and his bankruptcy attorney in April for failing to disclose the $1.785 million judgement. Both Rodriguez and his bankruptcy attorney deny the allegation, seeking a dismissal of Procida’s pending complaint, according to court documents. 

Accidental landlord

 

 Procida’s firm is currently financing multiple high-profile real estate projects in different parts of the region, such as the Divine Lorraine in Philadelphia, an ambitious undertaking to convert an abandoned historic building into luxury rental apartments and shops, as well as the Gulls Cove II condominium complex development in Jersey City. 

Still, Procida spends one day a week in his new Sleepy Hollow office on Cortlandt Street, where his full-time staffer, Project Manager Brian Foley, is in charge of day-to-day operations. 

Procida explained that his buildings are located within walking distance from the Tarrytown train station and that nearby waterfront sites have been developed into luxury residential complexes such as Ichabod’s Landing in the village and Hudson Harbor in Tarrytown. And just north of Ichabod’s Landing, there’s an ongoing mega-development, to be called Edge-on-Hudson, transforming the former General Motors site, he said. 

But unlike its surrounding neighborhoods, the Cortlandt Street community has been left ”in disrepair,” Procida said, adding that he will launch the Southwest Sleepy Hollow Property Owners and Merchants Association to spruce up the neighborhood as a whole. 

“It’s the greatest real estate investment opportunity,” he said. “I’m going to lead by example. I just spent a half million dollars, fixing up those buildings.” 

Sleepy Hollow Village Administrator Anthony Giaccio said he was aware of Procida’s effort. 

“Any developer interested in coming to the village to make improvements is welcome,” Giaccio said. “That’s a good thing for the village.”

Procida’s arrival in the village, however, might not have been entirely welcome at least in the beginning: One morning in April when Procida and his staff — along with Village Building Inspector Sean McCarthy — were in the basement of his building at 85-87 Cortlandt St. for an inspection, they had to rush out as a fire broke out in a vacant apartment in the third floor. 

The Westchester County Cause and Origin Team determined the fire was suspicious, and the case is still under investigation as of early October, said Sleepy Hollow police Lt. Michael Gasko. 

Procida expressed his frustration over the slow progress of the investigation, but his focus appears to have been unaffected by the incident. 

“Real estate is a very simple thing in the area like this. If you improve the quality of life by improving your buildings, you will make money,” Procida said. “But you can’t just care about your buildings. You have to care about everybody’s buildings.” 

Twitter: @LohudAkiko  

Article source: http://www.lohud.com/story/news/local/westchester/2017/10/11/new-landlord-sleepy-hollow-revitalization/681691001/