Florida Mortgage, Real Estate Regulators Investigate Suspicious Investment Deal

Numerous agencies are digging into the Florida real estate related mess that began with the collapse of Construction Compliance Inc.

According to the Sarasota Herald-Tribune, Tampa real estate investor Zanuel Johnson is in the midst of six federal and state investigators asking questions about the particulars of a home investment.

A meeting regarding an investment in the Southwest Florida housing market took place this month in the Tampa office of the Florida Department of Business and Professional Regulation.

Steve Hatch, an investor who bought a home from Construction Compliance and financed it with a Florida mortgage through Coast Bank of Bradenton, said he received a similar request by mail recently from the Florida Office of Financial Regulation in Tampa.

This marks the first sign other than the FDIC’s work with Coast Bank - the primary Florida mortgage lender in most of the arrangements - that regulators are looking into the situation.

Investors from California to New Jersey jumped at the opportunity to take out a Florida mortgage and sign contracts for investment homes.

The investors, many from the Northeast, were drawn to Florida real estate by companies that included CCI and Coast, Enchanted Homes of Fort Myers, American Mortgage Link of Tampa and Seashore Resorts of South Carolina.

The investors’ credit was used to secure construction loans with little or no down payments. With its homes, CCI promised to pay the interest until the houses were completed, and investors were promised huge returns after the investment homes were resold.

Johnson, a Tampa-based account executive with troubled national sub-prime (bad credit Florida mortgage) lender New Century, signed a contract to buy a home in Cape Coral built by Enchanted Homes and financed through Coast with American Mortgage Link as the loan’s originator.

The loan was made by Coast subject to documents that Johnson says were falsified by someone to show that he made a $43,000 escrow deposit.

Hatch, the Pennsylvania investor, says that he denied repeated written requests from American Mortgage Link to authorize large draws from his Coast home equity line of credit.

But he later found that $110,000 had been drawn from the account without his permission. Hatch now owns a lot in Sebring assessed at about $32,000 with only an uninspected concrete slab to show for it.

The request for Hatch’s documents was made by C. Benton Eisenbach Jr., area financial manager for the Office of Financial Regulation in Tampa.

More than 20 borrowers have completed a questionnaire about their Florida home loans with Coast, Eisenbach said Wednesday. He said the effort is an information-gathering process at this point.

“We’re talking to folks to find out what they were told and what data they were given,” he said. “We can see the documents from the record, but that doesn’t tell me what these people believed.”

The questionnaires have gone out through regular mail and e-mail. Some borrowers have passed them on to other customers. The Office of Financial Regulation follows up with phone interviews or meetings.

The office is looking for additional information about the roles of various firms identified as players in these Florida real estate investments, including Seashore Resorts, American Mortgage Link and Enchanted Homes.

Continue reading in the Sarasota Herald-Tribune …