Does anyone in Versailles have any decency?  Two years ago a potential client working as a mailroom clerk for 35 years - came into my office regarding a mortgage modification.  He and his wife each made $35,000 annually and he purchased a new Versailles Wellington Florida home costing $1,400,000 for his family and in-laws to live in.  He already had a home in Miami with a $170,000 mortgage that he wanted to keep. The 100% financing mortgage was a 1.4% pay-rate negative amortization and had no escrows.

Taxes alone on the house were more than either of their salaries, not to mention insurance, homeowners' association fees and maintenance costs.

His desire was to keep the home and although he was unable to pay my modest legal fee, he came to me 3 times - each time I told him he had been swindled.  On top of that, we was about to have mandatory retirement from his long time job.

It seems that this community - the swankiest looking over the top community in the Wellington community in Palm Beach County - is not littered, but now choked with foreclosures with buyers with similar stories.  Over 15% of homes in this relatively small community of under 450 homes built beginning in 2005 are in foreclosure.  Many of these foreclosure homes never saw a single payment of the mortgage - yet it took lenders 9 to 33 months to file a foreclosure action.  Many of these foreclosed homes have never been lived in (buyers take note!).

Now it comes out that most of these buyers all came from areas in the Miami area and many purchased not one, but more than one home - each time qualifying for a mortgage financing while keeping their already mortgaged modest home in the Miami area.

  Who benefited?  The builder sold the homes at double today's prices as if they each had $10 million dollars hidden in the attic.  The mortgage broker fees were significant on the loans.  And the poor purchaser sitting in front of me was still dreaming that this home was going to be his retirement paradise.

The Palm Beach Post newspaper this morning has an investigative article on the development "How Foreclosures Hit Versailles" with names, mortgage amounts, addresses of the buyers' modest home and foreclosed home, and lots of pictures.  This is the beginning of a valuable investigative effort by the newspaper well worth reading.

The frightening issue is not just that this potential client - and all the others - "qualified" for these mortgages.  I could understand if these were "flips that flopped" - but this buyer at least expected that he could afford to keep the house!!!  This expectation was not from an insane person, but he had been convinced by an apparently slick sales person that he could achieve an impossible dream and ensconce his family for their retirement in a palace - all on $70,000 a year.  I would bet that a good percentage of his co-foreclosed neighbors (that never even moved into their new home - probably because they could not afford the move) had that same dream. 

Who pushed these buyers to purchase homes that they absolutely could not keep?  What were these buyers thinking?  What was the seller thinking?  And what was the mortgage broker thinking?  Did none of these people have any decency to see what they were participating in was wrong?

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660  RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  Shortsales@Florida-Counsel.com  New Website www.Florida-Counsel.com. 

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