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The Atlanta Daily-Intelligencer | New News for the New South

Foreclosures, Real Estate

Trump Towers Site In Foreclosure

From the AJC:

The Midtown site of the proposed Trump Towers development has been listed for foreclosure, according to published reports.

The Atlanta Business Chronicle reported Friday that the site of the condo project at the corner of West Peachtree and 15th streets is scheduled for auction on March 2.

The planned development by Wood Partners was to include two towers, one 47 stories and the other 38, with 563 residential units.

You’re fired!

2008_11_17_2507_1, originally uploaded by ls1z28chris.

Business, Real Estate

Omni VP pleads guilty to cooking bank’s books

FORMER EXECUTIVE OF FAILED BANK PLEADS GUILTY

Former Bank Official Ignored Disclosure Reporting Requirements That Would Have Alerted Others to Massive Mortgage Fraud at Omni National Bank

NEWNAN, GA – JEFFREY L. LEVINE, 68, of Atlanta, Georgia, pleaded guilty today in federal district court to causing materially false entries that overvalued bank assets to be made in the books, reports and statements of Omni National Bank.

According to Acting United States Attorney Yates, the charges, and other information presented in court, LEVINE was Executive Vice President, the second largest bank shareholder, and head of the Community Redevelopment Lending Department at Omni National Bank from 2000 through October 12, 2007.
To keep non-performing loans current on paper, LEVINE and others at Omni failed to disclose many exceptions to their policies and procedures which resulted in Omni being exposed to a greater risk of loss. Practices that went unreported included: diversion of loan proceeds escrowed for rehab; excessive credit concentrations to a single borrower; funding additional loans for Omni foreclosures at ever-increasing amounts; and failing to create sufficient reserves for those questionable loans or to properly record them on Omni’s books and records.

Before takeover by the FDIC on March 27, 2009, Omni was headquartered in Atlanta with branch offices in Birmingham, Tampa, Chicago, Fayetteville, N.C., Houston, Dallas and Philadelphia. Omni borrowed Fed Funds at low rates to make high-interest, short-term loans through LEVINE’s Community Redevelopment Department to borrowers with less than stellar credit and often no steady employment or formal education. Such Omni borrowers were supposed to purchase and rehab distressed properties for prompt resale or Section 8 rental in run-down, inner-city neighborhoods.

Borrowers were expected to do most of the rehab themselves within a few months of the loan, and qualify for a loan to purchase a second property only when the first property was sold, or ready for sale. Omni, its regulators and investors relied on the expected increased value of the property after rehab to be we! ll in excess of the loan amount. The Redevelopment Department generated a significant portion of the Omni profits reported on its books and reports, although the facts now show that those profits were materially overstated.

LEVINE and others were well aware that none of the foreclosed properties could be sold on the open market for the amount of the outstanding Omni loans. A number of foreclosures were never disclosed on the Omni books as required, and some properties were resold up to five times at ever-increasing amounts. The actions of LEVINE and others at Omni resulted in an overvaluation of bank assets, which in turn misled Omni’s outside auditors, its Office of the Comptroller of the Currency regulator, its FDIC insurer, the Securities and Exchange Commission, and Omni shareholders. Such practices contributed to the over 500 foreclosures and an additional 500 non-performing loans, which resulted in at least $7 million in losses to the FDIC.

The evidence showed that the HUD Section 8 Program and its tenants also suffered, because many of the Omni-funded distressed properties were not rehabbed, but rather, stood vacant or were inhabited by squatters for years, corrupting other Section 8 properties and the community. Even if rented, the frequent Omni foreclosures resulted in unstable housing for Section 8 tenants, as well as increased crimes resulting from the vacant properties and transient tenants.

LEVINE was charged in a Criminal Information on December 22, 2009, with making, and causing others to make, materially false entries that overvalued bank assets, in the books, reports and statements of Omni National Bank, and today pleaded guilty to this charge. He could receive a maximum sentence of 30 years in prison and a fine of up to $1,000,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. Sentencing is scheduled for March 23, 2010, at 2 p.m., before United States District Judge Jack T. Camp.

Additional Omni-related prosecutions to date include:

MARK ANTHONY MCBRIDE, 43, of East Point, Georgia, who pleaded guilty on April 4, 2009, to fraudulently obtaining millions of dollars in mortgage loans from Omni and other lenders. MCBRIDE is scheduled to be sentenced on March 2, 2010 at 2 p.m., before United States District Judge Jack T. Camp. MCBRIDE remains in jail while awaiting sentencing.

BRENT MERRIELL, 37, of Atlanta, Georgia, was indicted on December 15, 2009, with six counts of aggravated identity theft and false statements in connection with his request to the FDIC for permission to “short sale” 14 properties for $2.2 million less than the Omni funded outstanding loans.

MERRIELL was facing foreclosure on each of the properties when the charges allege that he submitted “short sale” requests supported by forged and counterfeited sales contracts and loan commitments in the names of four people whose identities had been stolen. MERRIELL has pleaded not guilty to the charges and remains in jail awaiting trial. No trial date has been set.

DELROY OLIVER DAVY, 37, of Lithonia, Georgia, was charged in a Criminal Information on December 18, 2009, with bank fraud and conspiracy to commit bank, mail, and wire fraud in connection with a scheme to fraudulently obtain millions of dollars of mortgage loans from Omni and other lenders. At his initial appearance DAVY waived indictment and announced his intention to plead guilty to those charges in January 2010.

The plea hearing will be before United States District Judge Jack T. Camp.
The hearing date has not yet been set.

These cases are being investigated by Special Agents of a Mortgage Fraud Task Force for Omni-related cases, which includes FDIC-OIG, HUD-OIG, the Postal Inspection Service, the SIGTARP, and the FBI. The Task Force is continuing a number of Omni-related investigations, including inquiries related to Omni’s application for Troubled Asset Relief Program (TARP) funds.

Assistant United States Attorneys Gale McKenzie and Christopher Bly are prosecuting the case.

For further information please contact Sally Q. Yates, Acting United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan .

The Slammer, originally uploaded by B. Jaber Photo.

Real Estate

Atlanta luxury homes taking a beating

According to Trulia, Atlanta ranks 17th in the nation in the number of luxury homes (those originally listed at two million dollars and above) experiencing price reductions. 29 percent of homes have had their listing prices reduced, with an average reduction of 11 percent.

The total amount of reductions is $190,220,820.

, originally uploaded by whileseated.

Foreclosures, Real Estate

After the flood

From the Atlanta Journal and Constitution:

Cobb County officials expect that some owners of flood-damaged homes will simply walk away from their residences because the losses are so great.

Cobb County Manager David Hankerson on Tuesday looks at a restriction notice placed on a home in Powder Springs that had suffered severe
About 1,200 homes in Cobb County were severely damaged in last month’s historic flood, Cobb County Commission Chairman Sam Olens said.

A lot of the homes severely damaged by the recent floods were already underwater - before the rains even started falling. Now that owners are facing huge repair costs, most of which will not be covered by insurance, many will choose to let their homes go back to the bank.

Look for a glut of rain-damaged, rotting REO to hit the Atlanta market in the future.

X Underwater portrait, originally uploaded by javiy.

Real Estate

Atlanta home prices up 2.3 percent in July

According to the lastest Case-Shiller numbers, home prices in Atlanta increased 2.3 percent in July. It’s the fourth-straight month of gains.

Still, Atlanta’s home prices are 11.8 percentr below July of 2008.

Not a real 23, originally uploaded by Rantz.

Foreclosures, Real Estate

Georgia ranks 7th in foreclosures

From the Atlanta Business Chronicle:

For the third straight month, Georgia had the seventh-highest foreclosure rate in America, according to RealtyTrac’s July 2009 U.S. Foreclosure Market Report released on Thursday.

The report said Georgia had 11,136 foreclosure filings — default notices, auction sale notices and bank repossessions — in July. This was up 10.7 percent from July 2008, but down 20.6 percent from June 2009 (when it also ranked seventh). One in every 356 households in Georgia was served a foreclosure notice in July.

That the foreclosure rate is down over 20 percent from last month is certainly encouraging news indeed.

7, originally uploaded by billpan45.

Real Estate

Atlanta home prices drop 12 percent

From the Atlanta Business Chronicle:

The average Metro Atlanta home value was down 11.6 percent year-over-year in June, according to the second-quarter Zillow Real Estate Market Reports.

The report, published Tuesday, shows the average value of a home in metro Atlanta was $149,300 in June, compared with a U.S. average of $186,500.

Metro Atlanta’s average home value for June was down 0.1 percent from May and was down 0.5 percent when compared with the second quarter of 2008.

Atlanta has been spared much of the beating that property values have taken in other cities, such as Miami, Las Vegas, and Phoenix. Down only a dozen percent looks mild in comparison.

Given the state’s quick foreclosure laws, it is more likely than not that Atlanta will see a recover in prices sooner than elsewhere as those foreclosure properties work through the system.

12, originally uploaded by losvizzero.

Business, Commercial Property, Foreclosures

Clermont Hotel faces foreclosure

From the Atlanta Business Chronicle:

The Clermont Motor Hotel, which houses a strip club famous for its mix of eclectic and ageless performers, is facing foreclosure.

But the real estate agent listing the property as a redevelopment opportunity, said the owner is hopeful to stave off a forced sale from the courthouse steps.

The 85-year-old hotel on Ponce de Leon Avenue is scheduled to be foreclosed on July 7. Gene Kansas, broker and developer for Gene Kansas Developments, said the “owner is working on a deal with the lender and in hopes it will not be foreclosed on.”

The property has been for sale since at least April and with a listed price of $6.5 million.

Say it ain’t so, Blondie!

Clermont Lounge, originally uploaded by atomicvixens.

Foreclosures, Real Estate

Eon tries to fend off foreclosure

From Globest.com:

The developer of Eon at Lindbergh condominiums is hoping to negotiate a loan restructuring with its lenders prior to a planned foreclosure auction July 7 at the Fulton County Courthouse. The Harold A. Dawson Co., which has been working on the overall Lindbergh City Center project for the past decade, says its offer to put more money into the development was rejected.

The 352-unit Eon segment, which occupies 3.5 acres of the total 47-acre mixed-use project between Midtown and Buckhead, is tied to MARTA’s Lindbergh Station. Construction on the five-story, $70-million condo project began nearly three years ago.

Eon at Lindburgh was one of the first condos developments to offer steep discounting and multiple months of free mortgage to purchasers. In a market that’s now over-saturated with discounting, upgrades, autctions, and rental conversions, it’s not surprising to see condo projects end up on the steps. Odds are, it won;t be the last.

Processes OF Pre-Foreclosure, originally uploaded by peternamara1.

Real Estate

Georgia ranks 7th in foreclosures

From the AJC:

New figures released Wednesday put Georgia seventh nationally in the number of home foreclosures in April.

The report from Irvine, Calif.-based RealtyTrac Inc. said 11,521 homes in Georgia received foreclosure notices in April, an increase of 21.68 percent over April 2008. The numbers bring Georgia’s 2009 total to 44,979.

Fulton County led the way in April foreclosures with 1,846, followed by Gwinnett with 1,417, DeKalb with 1,081, Cobb with 693, Clayton, 595 and Henry, 534.

Nationwide, the number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates, according to RealtyTrac.

More than 342,000 households received at least one foreclosure-related notice in April, RealtyTrac said. That means one in every 374 U.S. housing units received a foreclosure filing last month, the highest monthly rate since the RealtyTrac began its report in January 2005.

The foreclosure crisis is far from over in Metro Atlanta.

Lucky Number Seven, originally uploaded by Nele en Jan.