A Coconut Grove house that sold for $450,000 three years ago is now on the market for $69,900. Located in the West Grove at 3780 Frow Avenue, it is more than a good deal, it is a prime example of what mortgage fraud can do to a house and what it has done to our country.
The house was built in ’92 with the best of intentions, a new CBS structure where an older house had stood. It looks nice enough, three bedrooms, two baths and central air. It went on the market four years ago for $225,000. This was when mortgage fraud was crumbling our country and regulators looked the other way.
Here’s how it worked in a case like this. You’re selling your house and someone incredulously “offers” you twice as much as your asking price. You accept the fishy proposition and the buyer applies for a loan. A bank, wanting all the business it can get, forks over the money, maybe $400,000 (90%) in a case like this. The buyer gives you your $225,000, keeps the other $175,000, then skips town. The bank sells the mortgage to an investment firm and never thinks about the house again.
The house sits abandoned. No mortgage payments are made and it goes into foreclosure. This particular house has sat empty for two years.
While the front windows are boarded (keeping squatters out), a peek in a side window reveal a nice enough abode, white on white. I’m quite familiar with it as I own the rental next door.
It took two years for 3780’s foreclosure proceeding to snake its way though court. The house recently went back on the market for $89,000. When it did not sell immediately the price was dropped to $69,900. This is 15% of the “sales price” three years ago and about 30% of its true value when prices were high.
Whoever buys the 3/2 on Frow will get a pretty good deal. Who knows, the house’s value could rise dramatically in the coming years (the agent's number is 305-992-5967).
Unfortunately the house represents a bad deal, a horrible deal, a huge punch in the gut of our nation’s economy. It’s a tiny grain in a truckload of sand that got dumped on our country. The mortgage fraud crisis has cost the U.S. billions of dollars and hundreds of thousands of jobs. Let’s hope we can dig our way out and avoid more of these “good deals” in the future.
BREAKFAST FROM A TREE
We found this carambola ("star fruit") peeking down from the backyard greenery this morning.