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They Weren’t Even Really A Company, It Was A Ponzi Scheme

A report from the Orlando Sentinel in Florida. “Home foreclosures in Orlando grew by 60 percent in the first quarter compared with the year before, even as foreclosures nationwide are falling. Lenders foreclosed on 2,049 homes in the first three months of 2019 in Orange, Seminole, Osceola and Lake counties, according to Attom Solutions, an increase from 1,280 in the first quarter of 2018.”

“Foreclosures had been falling sharply since the peak of the housing crisis in 2009 and 2010. But that changed at the end of 2018, when there was a sudden spike. Attom’s Todd Jones said rising house prices combined with the region’s low wages might be a factor in the rising number of foreclosures. Jones said home affordability in Orlando has dropped below its historical average.”

“‘So homebuyers are more financially stretched,’ said Jones, Attom’s chief product officer.”

The Weatherford Democrat in Texas. “Willow Park officials are looking to partner with local, reputable companies after the builders on 18 homes in Meadow Place Estates, Serene Country Homes, LLC, abandoned the lots. The issue was brought up by Willow Park resident Shivaun Palmer after she read an article published last week about Serene Country Homes, which has a Fort Worth address.”

“‘I’m so excited about living in this community and my husband and I drove by [Meadow Place], and it’s just heartbreaking to see those houses unfinished,’ Palmer said. ‘It’s a lovely neighborhood and I just felt devastated for the people that have built their homes there.'”

“According to WP Communications and Marketing Specialist Rosealee Kertok, Serene Country Homes started building in 2017, but never finished the homes. The city was told Serene Country Homes ran out of money.”

“‘The houses were owned by two different sets of investors — nine of them are owned by Global Forest [LLC] and nine of them are owned by another investment company,’ Kertok said. ‘Serene is the builder on all 18 of those lots and they were doing the building for Global [Forest] and the other company. None of them are completely finished and they are in various stages of construction — some of them are closer to being done than others.'”

“According to the Serene Country Homes website, homes in the Meadow Place Willow Park development are listed at a starting price of $285,950, going up to $369,950. But as far as the city knows, no one had purchased any of the unfinished Serene homes.”

“WP City Manager Bryan Grimes said they became aware of the situation sometime in October 2018. ‘We reached out to them and at that point they still had an employee. We got the standard, ‘It’s going to be OK, we have a cash-flow problem.’ Every time I hear a contractor say they have a cash-flow problem, it’s going to get bad,’ Grimes said.”

“The city was unable to get any further communication from Serene. ‘You’re not going to get anything out of them,’ Grimes said. ‘They weren’t even really a company, it was a ponzi scheme. They had [foreign] investors and it was set up so if you invested in the property, you got an unexpired green card — you got citizenship for it. If you noticed in January, you saw a bunch of Asian people driving around the neighborhood and stopping, getting out and taking pictures. That’s what that was, the individual investors.'”

“Grimes said the lots are a public safety hazard and are full of debris. He added that two months ago, when temperatures hit below freezing, the shower heads in the unfinished homes burst, causing water to flow out. According to an article that was published by CBS DFW on Nov. 13, 2018, homeowners in the Trails of Fossil Creek and The Hills of Windridge said Serene had yet to finish the houses or complete warranty work on their homes.”

“Sherry Huckaby closed on her home in The Trails of Fossil Creek back in April 2018, but her home wasn’t finished until a month later. She said the experience has been anything but ‘serene.'”

“‘We have about the same number of houses that were abandoned in our neighborhood too. I don’t know how many are in the White Settlement neighborhood, but I drove out there one time and saw about 10 to 15 at that point. It’s a mess,’ Huckaby said. ‘I closed on my house at the end of April, but it wasn’t finished. They still hadn’t gotten the air conditioning working and they had all sorts of problems. I found out later on that they did that to a lot of people, so they were just pushing to get the money for the sales.'”

“Huckaby said she saw Serene employees come back and finish one home in her neighborhood and in The Hills of Windridge. ‘They’re doing it under the radar because you can’t get anybody to talk to, they’re all gone. There’s actually one house on the street behind me and one house that I saw in White Settlement and they got those two houses to a completed status and they’re trying to sell them now,’ Huckaby said. ‘The problem with Serene is not only are they tied to a foreign investor company, A2A [Developments], but they’ve opened so many LLCs that God knows where the money is. You have 20 LLCs and you can shove that money wherever you want to.'”

“A lawsuit was filed on Nov. 6, 2018, by more than a dozen investors against Serene Country Homes, Windridge A2A Developments, Fossil Creek A2A Developments and Foo Tiang Meng Dirk Robert as the tustee of Windridge Trust and Fossil Creek Trust, according to the official document filed with the Tarrant County District Court.”

“‘Right now I’m sending all the information I can find to the investors’ attorney so if somebody is going to sue them, they’re going to get all the information I can give them,’ Huckaby said. ‘So that’s where I am now.'”      

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This Post Has 38 Comments

  1. ‘Lenders foreclosed on 2,049 homes in the first three months of 2019 in Orange, Seminole, Osceola and Lake counties…Foreclosures had been falling sharply since the peak of the housing crisis in 2009 and 2010. But that changed at the end of 2018, when there was a sudden spike’

    A spike all across the country, and dutifully ignored by the MSM. I wonder why? Note the 60% increase on top of the “spike”.

    ‘the region’s low wages might be a factor in the rising number of foreclosures…’So homebuyers are more financially stretched’

    This wages shack prices thing has only been going on for what, a decade? And all the while loans got easier. Hmmm, it’s almost like the easy money was what made the prices go up all along, until, DONG!

    1. Yeah, and all they appear to care about are the scare tactics of rising interest rates and perpetuating the myth of a shortage; it has nothing at all to do with the obscene price gouging of builders, sellers and realtors, who are all taking advantage of free money from the Fed and catering to the wealthy with ridiculous luxury while they throw the middle class under the bus.

  2. ‘Grimes said the lots are a public safety hazard and are full of debris. He added that two months ago, when temperatures hit below freezing, the shower heads in the unfinished homes burst, causing water to flow out. According to an article that was published by CBS DFW on Nov. 13, 2018, homeowners in the Trails of Fossil Creek and The Hills of Windridge said Serene had yet to finish the houses or complete warranty work on their homes’

    Thanks to the poster who brought this to the HBB. I want to note something about this really remarkable situation: for all the resources in the DFW media, and all the attention they put on this “hot” market, this was out there and they all ignored it.

    It’s for this reason I ignore the trolls with their “everything is awesome cuz the media says so” crap. The media is part of the REIC and will lie until the day your shack is foreclosed.

    1. But but but I found an article in USA Today cited studies from unbiased Owners.com that a couple that brought in 2012 did very well….very well. Thats mean everyone will be A-OOK

    1. “Yun says tax policy changes will likely add further complications to the housing sector. “The lower-end market is hot while the upper-end market is not. The expensive home market will experience challenges due to the curtailment of tax deductions of mortgage interest payments and property taxes.”

      In other words the whole state of California!

  5. ‘Right now I’m sending all the information I can find to the investors’ attorney so if somebody is going to sue them, they’re going to get all the information I can give them’

    Lawsuits piling up, unfinished shacks, thousands of foreclosures in one supposedly “hot” city. Things are not what we’ve been told.

    1. “The problem with Serene is not only are they tied to a foreign investor company, A2A [Developments], but they’ve opened so many LLCs that God knows where the money is. You have 20 LLCs and you can shove that money wherever you want to.’”

      Sounds legit to me… /s. Shell companies, visas for foreigners that “invest” in US RE, it is very unlikely these foreign investors planned to follow through with completing these shacks. Just like a stock, they set a number to bail out at and disappeared with hay-bails of the FBs money. But hey, free green card and a digital wallet full of untraceable crypto!

      1. Jesus, those places are hideous. Reading that gives me a headache. Reminds me of the old FDIC days. Trying to recover from overseas crooks. Good luck with that.

    3. Well don’t tell that to these folk$:

      BofA Offers New $olution for Low-Down Mortgage$:

      Hurry, hurry, hurry!

      (This offer is available on first mortgage applications taken between April 15 and October 31, 2019.)

      We know many of our clients want the power to own their first home, which can sometimes be challenging. One of the ways we’re helping is through our suite of affordable homeownership solutions and professional resources, which aid them in overcoming barriers and put sustainable homeownership within reach,” said D. Steve Boland Head of Consumer Banking at Bank of America.

      On the heels of its recent $5 billion commitment to help more than 20,000 individuals and families buy a home, Bank of America is offering a $0 Lender Origination Fee for clients who close a FHA, VA, Affordable Loan Solution, or Freddie Mac Home Possible mortgage with the bank.

      This offer is available on first mortgage applications taken between April 15 and October 31, 2019. To reduce upfront costs further, Bank of America said that the limited time offer can be combined with:

      America’s Home Grant program: This program has been expanded and now offers a lender credit of up to $7,500 that can be used towards nonrecurring closing costs, like title insurance and recording fees, or to permanently buy down the interest rate. The funds, which do not require repayment, are available in 39 markets today and will soon be nationwide.

      Affordable Loan Solution mortgage: This fixed-rate loan for low- and moderate-income borrowers offers a competitive rate with a down payment as low as 3% and no mortgage insurance. Today, 90% of these loans are to first-time homebuyers.

      Freddie Mac Home Possible mortgage: This is a fixed-rate loan with a down payment as low as 3% and lower-cost mortgage insurance.

      Down payment and cost savings programs offered by state and local agencies, nonprofits and employers.

      https://dsnews.com/headline/04-18-2019/bofa-solution-low-down-mortgage

  6. Anybody got any intel on the OC right now? I have my eye on a place in San Clemente. Would be my last and “retirement” house. The prices there are crazy but I don’t see things selling very fast. Any info appreciated. It’s over $1M (don’t say it). LOL

    1. Guess it depends on your situation. I can’t speak directly for SoCal but it seems that the entire Ca coastal market is at a stand still and up where I’m at, declining. If your in a situation where you don’t mind being upside down if the market crashes and have the money mabye now is ok. For me I rather go with my gut and wait out the SALT impacts, uncertain economy, disappearing of FBs and foreigners, and (fill in the blank) other headwinds to commit to such an investment. My advice for at least the short term would be to rent in your desired neighborhood and make sure it’s truly where you want to live.

      1. ” … wait out the $ALT impact$”

        Geez, stay hip, the trick$ters have all kind$ of “$olutions”:

        Quicken Loans will now let Vrbo host$ use rental income to refinance their mortgage
        Income generated by short-term rentals will be used in underwriting
        April 17, 2019 Ben Lane

        A little over a year ago, Airbnb partnered with some of the nation’s largest mortgage players, including Fannie Mae and Quicken Loans, to allow hosts using the short-term rental platform to use income from their rentals to refinance their mortgage.
        Now, Quicken Loans is at it again; this time partnering with Vrbo, a competing short-term rental platform, to allow u$ers of that platform to use rental income earned through Vrbo to refinance their mortgage.

        According to Quicken Loans, borrowers can use income generated from offering their properties for rent as vacation homes on Vrbo to qualify for a refinance.

        Typically, only rental income that comes from an investment property can be used when qualifying for a mortgage. Income from short-term rentals was not eligible to use in the mortgage underwriting process, although it should be noted that many short-term rental users use income derived from those rentals to pay their mortgage.

        In fact, according to Vrbo, more than 50% of the site’s property owners use rental income to cover at least 75% of their mortgage payment.

        And now, they’ll be able to use that income to refinance their mortgage as well.

        https://www.housingwire.com/articles/48822-quicken-loans-will-now-let-vrbo-hosts-use-rental-income-to-refinance-their-mortgage

      3. I lived there before in the late 80s. It would be a cash purchase and I don’t care if the value goes down (a little). But I do remember the crash in ’08. The good news is, nobody’s breaking the door down so I have time to think about it. I do want it. It’s a great house.

  7. Lending standards were relaxed again during this cycle. The “regulators”.were complicit in this; actually encouraged it. Must keep the gravy train going. Problem when economy weakens. What about non-bank lenders? I don’t see this ending any differently than last time, except now everything bubble. A lot of people will be really pissed if the oligarchy tries to play the taxpayer bailout card again… My guess: SHTF by 2020. Multiple bubbles in synchronized decline.

      1. The frustrating thing is I think she’s one of the best candidates on the D side in spite of her issues. But she seems to be getting no traction compared to the various flavors of the week. Doesn’t bode well for the Ds at all. Best they can hope for is a total economic meltdown before the election. They might get it.

          1. I would think that the right woman could do much better against Trump than a generic white guy. But she would have to be an expert counter-puncher who could beat him at his own game of getting down in the gutter as needed to humiliate his opponents. Hmmm, Lisa Lampanelli was even on his show…

        2. I agree Carl. I think Warren would be a phenomenal POTUS. I would settle for her as VP or in a cabinet position though.

          1. Problem is, she and the rest of the Ds have already started the race to see who can promise the most gun control. Considering these races are won and lost on narrow margins it’s a really bad strategy despite its appeal to their base. I now expect Trump to win if the economy can limp across the line.

    2. I wouldn’t object to some kind of forgiveness for some of the TUITION portion of the debt. But in exchange, the students should declare BK and surrender their precious credit cards. And they should garnish Social Security for room and board.

      1. they should garnish Social Security

        Reaching 40 years into the future and clawing back retirement funds goes against the basic concept of bankruptcy law.

      2. To me its not enough surrendering their college degree means they cant apply for jobs that require it.

  11. “The price$ there are crazy …”

    The good new$ is the Nuclear power plant 3 miles south of town is decommi$$ioned … the plan now is to keep the spent fuel$ on $ite.

    The new hou$ing is inland east of the 5 freeway, everything West of the 5 (< 1 mile from beach) is rebuild/remodel & do you know the term: "$pendy"?

    Also, you have the USMCA (the one with guns, knot butter) @ Camp Pendleton City will protect you from amnesty seeking Central American families.

    Also, Amtrak to LA & San Diego & commuter rail trains.

    There's even a "Welcome.To.California!" Center, lots of free $tuff & wifi!

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