Authorities To Review Mortgage Operation

By SHANNON BEHNKEN The Tampa Tribune

Published: Jul 31, 2007

TAMPA - The St. Petersburg Police Department's Economic Crimes Division said Monday that it wants to review settlement documents of buyers of hundreds of homes in south St. Petersburg.

The buyers were in a real estate investment program that resulted in 160 foreclosures outlined in an investigative story in Sunday's Tampa Tribune.

"We're going to try to make contact with investors and see if there are elements of a crime here," Sgt. Kevin Smith said.

City officials in St. Petersburg say they are concerned about the possibility of more foreclosures, which could result in vacant homes in an area already plagued by crime. Tom de Yampert, the city's manager of housing and community development, said the city wants to help buyers who may be on the verge of losing their homes.

"I see a trend," de Yampert said. "Now I want to document it. This is far from being over."

The Tampa Tribune's investigation found 65 buyers purchased 303 homes during the past five years. Fifty-three percent have gone into foreclosure. Buyers say they were blinded by an opportunity to make money and looked past strange settlement documents. Now, many blame the "no-money-down" investment program that arranged their transactions.

The program is run by four companies owned by Tampa businessman Joseph F. Daniele.

Daniele's attorney did not return a call seeking comment for this story. In a previous interview, Daniele, who runs Titan Development Group LLC, said there is nothing wrong with his business practices and blamed buyers for failing to manage their investment properties.

The Tribune reviewed public property documents on hundreds of homes, obtained settlement documents on 20 transactions and interviewed more than two dozen buyers, real estate agents and others involved in the sales.

Among the Tribune's findings:

•Settlement documents indicate buyers consistently made $15,000 to $25,000 down payments. However, buyers say they did not bring any money to the table. Misrepresenting funding to lenders is against federal law.

•In 11 cases, settlement documents show prices included a total of $272,716 paid to companies Daniele operates. Daniele said the money was to pay for repairs, but a seller and some buyers dispute this.

•Most buyers interviewed said promised repairs weren't always made and work was shoddy, even though documents show Daniele's companies received thousands of dollars, as much as $35,010, for example, at one closing. Daniele said the money was to repay him for work done before the sale.

•One lender confirmed to the Tribune that it received a sales contract with a higher sales price than the one turned in to a real estate broker. It is against federal law to withhold or misrepresent information that could influence a lender's decision to fund a loan.

Buyers say the purchase price of the homes included the repair work and some now think they overpaid for their homes.

They also say they were encouraged by Daniele or his associates to buy as many homes as they qualified for. Several buyers who were interviewed purchased five or more homes within months.

ABN Amro Mortgage Group sued Daniele in Ohio in 2005, calling him "the primary architect of the scheme" involving hundreds of homes that went into foreclosure, leaving the lender with millions of dollars in loan losses. The case is in court.

The Florida attorney general's office is conducting a preliminary review of the transactions, said spokeswoman Sandi Copes. Such a review is standard practice, she said, when consumers have complaints.

"We're more than happy to review complaints," she said. "We could look into civil aspects and would rely on law enforcement to look into any criminal activity if there is any."

CONSUMERS WITH QUESTIONS CAN CALL:

•St. Petersburg Housing and Community Development Department, (727) 893-7788

•St. Petersburg Police Department's Economic Crimes Division, (727) 893-7618

•Florida attorney general's Economic Crime Division in Tampa, (813) 287-7950

Reporter Shannon Behnken can be reached at (813) 259-7804 or sbehnken@tampatrib.com.