Hat tip to downturn for sending this along, from tampabay.com:
When armored vehicles knocked down the house on 28th Avenue S in St. Petersburg on Monday, it climaxed an hours-long gunfight that claimed the lives of two St. Petersburg police officers and the wanted felon who shot them, Hydra Lacy Jr.
It was also the last echo of the frenzied house-flipping that lured Lacy and millions of other investors during the nation’s real estate boom.
The Crayola-orange dwelling at 3734 28th Ave. S was the only house among seven that Lacy bought between 2004 and 2007 that did not end up in foreclosure. But like all the others, its flattened remains are testament to a bust that has hit St. Petersburg’s Midtown area especially hard.
“The properties are back in the 20s, 30s, 40s, and three years, maybe four years ago they were in the $100,000-plus amount,” says Lou Brown, a veteran real estate agent. “I guess maybe we got a little greedy.”
Lacy first plunged into the real estate market in February 2004 while he was still single and just three years out of state prison. He had served nine years of a 20-year sentence for raping a high school student.
At some point after his release, Lacy made good money as the foreman of a trucking company, his sister-in-law has said. But it is not known if he was employed when he got 100 percent financing for the $116,000 purchase price of the house in which the violent episode played out Monday.
The lender, North Carolina-based Decision One Mortgage, catered to borrowers with poor credit. It went out of business in 2007.
Lacy married Christine Mary Jewell Pitts on July 4, 2004.
Two years later, the couple refinanced their home for $180,000. About the same time, they bought a house on 11th Avenue S for $135,000. The sellers, a St. Petersburg couple, had purchased it less than three months earlier for $74,000.
In August 2006, the Lacys bought another house. They paid $135,000 for a place on 23rd Street S that had sold two years earlier for $80,000.
Such price jumps in the area were not unusual then, Brown says.
“The decade or so before, there was a lot of investment on the north side (of St. Petersburg), so much so that it may have been saturated, and so investment came over to the south side,” Brown says. “That really led to the real estate boom and a lot of values in the south side shot up.”
(Brown was not involved in any of the Lacys’ real estate transactions.)
The market was beginning to cool by 2007. But that didn’t stop the Lacys from paying what turned out to be top dollar in three separate transactions that year.
By April 2007, a Largo woman, Kasenie Akbarally, had defaulted on two houses on 23rd Avenue S that she had bought in 2005 — one for $97,400, the other for $95,900.
Yet within three months of getting foreclosure notices, Akbarally managed to sell both houses to the Lacys at a hefty profit. They paid $145,000 for each.
That May, a New York woman, Shermeela Asgaralli, received a foreclosure notice on a house in Largo that she had bought for $95,000 in 2005. Yet she, too, quickly sold to the Lacys for $145,000.
Neither woman could be reached for comment. All three deals had a common denominator — a 35-year-old felon named Aneil Balkissoon.
Balkissoon, who signed for the women as attorney-in-fact, had been released from state prison in 2003 after serving almost two years for charges that included forgery, burglary, grand theft, fraudulent use of credit cards and trafficking in stolen property.
On his MySpace page, Balkissoon lists his occupation as “real estate” though he has never had a Florida real estate license, according to state records.
Balkissoon briefly returned a reporter’s call for comment and said he’d call back when he had more time to speak. He did not call back and did not respond to voice messages.
In October 2007, even though prices were sinking, the Lacys made their final and most expensive purchase. They paid $165,000 for a house on 15th Avenue S that had been owned by a woman since the 1970s.
As with most of the other houses, they apparently put down several thousand dollars and borrowed the rest.
Hydra Lacy had worked almost continuously since their marriage and once made $50,000 annually, Christine said in a deposition taken after he was charged in 2009 with attacking her with swords and liquor bottles. But she said his income had plunged after he was hurt in a motorcycle accident around 2006.
Christine Lacy said she too worked, at one point holding down three jobs because of the “economical times.” By 2009, the couple were in default on six of their seven houses.
Last Nov. 8, Hydra Lacy quitclaimed the deed to the seventh house — the first one he ever bought — to his estranged wife.
Today, one of the houses is for sale and two appear vacant. Another, on 23rd Avenue S, has been declared unfit for human habitation. And the city of St. Petersburg bought the one just down the street for $19,800, using federal funds earmarked for acquiring foreclosed properties in run-down condition.
“Typically we either renovate and sell them to qualified families or we demolish and build new houses,” says Paul Stellrecht, one of the city’s economic development coordinators.
Last year the city got a demolition permit and the house fell to the same fate as the one razed by police on Monday. All that remains is a vacant lot and a “No Trespassing” sign.
Greed, stupidity, naiveté and the ability to obtain credit are a horrible combo.
These type of people NEED to be foreclosed on and evicted to save them from themselves.
Notice the part where Lacy was making decent money as the foreman of a trucking company. If he had just rented and saved his money this entire “ownership” standoff might have been avoided.
It’s really sad to see this type of thing play out.
I happened to be visiting my aunt in St. Pete that day!
“Lacy first plunged into the real estate market in February 2004 while he was still single and just three years out of state prison.”
I repeat. We are not going to begin to turn around the “housing market” until tens of thousands of criminals, from D.C. to Wall St. to main street are sent to prison. It’s-just-not-going-to-happen.
Lacy would be still flipping right now if the economy hadn’t caught up with him. There are STILL people out here trying to flip. Criminals don’t learn from mistakes, they’re encouraged by them.
What these types of people REALLY need are loan qualification standards that deny them loans they won’t be able to pay back. It’s easy to say that people who make bad homebuying decisions are just stupid after you’ve bought and sold a few, but I remember my first home purchase, and if it hadn’t been for tight lending standards and heavily enforced realtor rules, I could have easily made a huge blunder.
There’s an old saw that says you can’t cheat an honest man, but in the modern business world I think most of us know that’s not true.
consultant, I just don’t see that happening. We are practicing a form of capitalism in this country where the ends justify the means. As long as you made money within the rule system, you are good.
The rule system is extremely flexible and there’s a whole of lot stuff that should be illegal and isn’t. Those things are broken on purpose, they remain legal because key players are making money using those tactics and nobody wants to stop making money.
What we are witnessing is the damage that comes from allowing sleazebags to prey on people who aren’t very bright. Yes, there was a lot of good old fashioned greed in there from people who HELOC’d all the value out of their homes and did all manner of stupid things. But there was also a lot of outright fraud and questionable advice given to buyers from people that they thought were trusted professionals.
None of this has been fixed and will not be fixed because our current brand of capitalism feels that preying upon the people who aren’t capable of critical thinking is fair game. The greedy will get their comeuppance in the end, but the not-so-bright are going to get the shaft — legally.
We live in times where predators are rewarded. Guard yourself accordingly.
Art Eclectic,
So true.
If Jim were able to take over the FED & HUD for 1 year, what would he do?
I would suggest abolishing BOTH the fed and hud.
When banks are FORCED to accept the losses suddenly losing/stupid loans won’t be available.
What happened from the FCIC.
http://www.fcic.gov/report/conclusions
My question is has anything really changed?
If Jim were able to take over the FED & HUD for 1 year, what would he do?
1. I’d expand FHA by eliminating the cap on loan amounts.
2. I’d make the MMI (mortgage insurance) commensurate with the down payment.
Currently I believe it’s 2.25% for the minimum 3.5% down payment that goes directly into the FHA fund for future losses. Let’s put it on a sliding scale (I think it is currently) where it goes to zero with 20% or 25% down.
They had $11 billion in it as of September, and if it started going down I’d raise the MMI. At some point the private lenders and/or mortgage insurance companies would find it profitable to join in and offer the same or better programs.
Mortgage lending is a money-maker. As long as the tax payers aren’t forced to support FHA like they are with Fannie/Freddie, let’s do it.
3. FHA refinances only if you have 30% or more equity.
My question is has anything really changed?
One BIG change – you must qualify for a mortgage now.
It eliminates all the EZ-qual buyers (like realtors, mortgage brokers, etc.) that were like Lacy above buying multiple properties with low or no money down.
It is stunning that the decline hasn’t been much worse, on both ends – that there aren’t more defaults due to these no-skin-in-game grifters, and that there are so many buyers today who not only qualify but are willing to use good-sized down payments.
That’s #1,2&3 in this article (http://online.wsj.com/article/SB10001424052748704698004576104500524998280.html?mod=WSJ_Opinion_LEFTTopOpinion), but what about the other seven? They will do the same thing with some other scheme, which I believe will have something to do with “green” technology.
but what about the other seven?
Forbid Angelo Mozilo from getting back into the mortgage business?
If private securtization of mortgages happens again, buyer beware. The buyers got greedy, and they trusted that the paper was safe enough – and got burned.
I have no sympathy for the private-label MBS buyers. They could have learned how a neg-am loan worked, and figured out that 80/20 financing of million-dollar properties was ill-conceived.
I think the current mortgage market is safe. I’ve only seen the one foreclosure that was originated after the summer of 2007, the end of the EZ-money era, and it was a VA-no-no.
Forbid Angelo Mozilo from getting back into the mortgage business?
How about a perp walk on the orangeness!
He’s gotta be in the BVIs by now, plus BofA has his back, legally-speaking.
He is outside of Santa Barbara in Montecito.
My brother spent today at the viewing and funeral for these officers. Sargeant Baitinger was his friend and co-worker.
It’s hard to avoid the implication in this thread that Lacy’s real estate dealings either led him to this final criminal act, or are somehow reflective of a class of people who are prone to this type of criminality.
There are so many tragic aspects to this story that it’s totally disheartening to see it distilled down to something so unsubstantiated and meaningless.
CR
P.S. to GeneK and shadash, the phrase “these types of people” is a variant of a common linguistic construction in the Old South. It’s just as offensive in California.
Context is everything. The only “type” of person being referred to here is someone who isn’t knowledgeable enough to realize when they’re being sold a bill of goods by a shifty mortgage broker or realtor, and they come in all shapes, sizes and colors.
HSBC was the bank who sold the loans. Funny how the mayor of Saint Petersburg is a real estate profesional Attorney. You would think he might not have any knowledge to any of these Real Estate fraud events. I think they are all in on the real estate fraud, the mayor has found no time to put any of these people in jail, but he can build Mrs. Lacy a new home and replace her personal property after the police torn down the lacy home to kill a criminal leader. Sick living in Purgatory the City of Saint Petersburg.
No armored car company is thinking what a mess can such a car do, they only think to the safety of the passangers.