Sometimes you stumble upon a travesty that indicts not just real estate and banking but also the government overseers who were supposed to be keeping those industries' worst instincts in check.
Case in point: a 107-year-old house near downtown Tampa, a one-story wood-frame home hugging the edge of the Ybor City National Historic Landmark District.
Because of mortgage shenanigans and governmental lapses, the 1,500-square-foot bungalow at 909 E 12th Ave. will likely end up costing taxpayers more than a quarter-million dollars.
It has been through eight owners in less than four years, including housing speculators who milked the property for large mortgages before fast-tracking the property into foreclosure.
To crown the absurdity, months after the latest homeowner dedicated tens of thousands of dollars to repairing the dilapidated house, the state announced it's seizing the property through eminent domain. It stands in the way of a high-speed rail line that the state wants to build along Interstate 4 between Tampa and Orlando.
The pillared, metal-roofed bungalow sits on a section of 12th Avenue that abuts an interstate overpass. It belongs to what maps still call the "Deutsch Amerikanischer" neighborhood, an old immigrant enclave dominated by the neo-classical German-American club on Nebraska Avenue.
In February 2006, the home's aging owners decided to sell after 30 years. Property investors sized up the structure — and its none-too-placid proximity to the streams of Interstate traffic — and agreed to pay $60,000, according to property records.
Keep in mind that buyers and sellers arrived at that price at the top of a real estate market. But the house's market value didn't crater along with the market. Far from it. A series of real estate flips over the next year pushed the home's price into fantasyland.
The first buyer didn't waste a day before selling the house for $104,000. That deal resided within the realm of reasonableness. Not so the next flip of the house. The guy who bought it for $104,000 sold it a month later for more than double what he paid.
The new owner got 100 percent financing for $210,000 from the soon-to-be bankrupt New Century Mortgage, at the time the country's second-largest subprime lender.
He quickly fell into default and, foreclosure looming, arranged a sale a year later. You'd imagine a decrepit foreclosure home in a distressed market would never sell at a profit. You'd be wrong.
The new owner paid $240,000, a deal financed by JPMorgan Chase Bank. In 15 months, a $60,000 house in questionable condition had quadrupled in price to $240,000. Amazingly, lenders kept financing repeat sales of this turkey.
You can probably guess what happened next. The new owner, to all appearances a shell buyer in a real estate scam, never made monthly payments.
A year later, in the summer of 2008, JPMorgan foreclosed on the house. The federal government quickly assumed ownership through its Fannie Mae mortgage subsidiary.
Enter Mark Howard. With a mind to buying a pad close to Ybor City nightlife, the Tampa resident discovered the wreck for sale. Windows were smashed and covered with plywood. Vandals had carted off the kitchen cabinets. Despite the house's historic designation, the county rated it wrecking ball fodder.
In February 2009, Fannie Mae sold the house to Howard at a nearly $200,000 loss. He paid only $37,200 and quickly poured more than $60,000 into the fixer-upper.
But the government had sold too soon. Within weeks, the Florida Department of Transportation was chasing federal stimulus money to build a multibillion-dollar high-speed rail line between Tampa and Orlando.
Howard got a letter: The state would seize the house through eminent domain. But it's no longer worth just $37,200, and it can no longer be torn down legally since Howard rehabilitated it out of its dilapidated state.
So once Howard and the DOT come to terms over price, the state will have to hoist the bungalow onto a trailer bed and donate the "landmark" to the city of Tampa for relocation.
The tax-paying public gets the tab for this circus of errors: the negligent lending that financed real estate scoundrels, Fannie Mae's foolhardy mortgage guarantees, the government's poorly coordinated sale and repossession of the house.
Why didn't the state just buy the beat-up house from the Feds for $37,200? Howard asked that very question of a DOT official.
He wasn't shocked by the half-joking answer: You know we don't talk to each other in government.
James Thorner can be reached at firstname.lastname@example.org or (813) 226-3313.