BROOKSVILLE — John Druzbick, whose job includes oversight of Hernando County's $400 million-plus annual budget, has had two investment homes in Daytona Beach foreclosed on while he has served on the County Commission.
The most expensive of those properties — a two-bedroom, two-bath, ninth-story oceanfront condominium — was not disclosed on a form that Druzbick filled out when he ran for the commission in 2008.
State law requires that public officials and candidates disclose their interest in real estate and other property annually, along with liabilities.
When the Tampa Bay Times asked Thursday about the foreclosures and the failure to disclose one of the properties, Druzbick strongly denied that he was trying to hide anything. He said he thought that because the financial background of his wife, Deborah Walker-Druzbick, was used to secure the mortgage, he didn't have to disclose it, even though his name is on both the deed and the mortgage.
Immediately after talking to the Times, he contacted the Florida Commission on Ethics, which oversees financial disclosures. He said afterward that he would amend his disclosures to ensure that he was in full compliance with the requirements of law.
As for having two foreclosures in the past three years, he said he made bad investment choices and described a series of problems with mortgage companies that cost him and his wife their oceanfront condos.
Property records show that Druzbick was buying and selling real estate during the volatile property boom and bust of the past decade.
Druzbick bought his first property in Daytona Beach eight years ago. Volusia County property records indicate that he and his wife purchased Unit 704 at the Harbour Beach Resort at 701 S Atlantic Ave. for $54,000 in January 2004. The 399-square-foot beachfront condo was on the seventh floor.
In March of the following year, the Druzbicks purchased another unit in the complex, Unit 614, for $176,000. They took out a $132,000, 30-year mortgage on the 615-square-foot, sixth-floor unit.
Then, in June 2005, the Druzbicks sold their original unit for $138,000, more than twice what they had paid.
In May 2006, the couple bought Unit 902 at the Horizons Condominium for $450,000, property records indicate. They took out a 30-year mortgage for $405,000. Built in 1979, the two-bedroom, two-bath, 1,347-square-foot condo was on the ninth floor at 1420 N Atlantic Ave., a mile and a half from their other condo.
Not quite a year later, in March 2007, the Druzbicks used the condo they still owned at Harbour Beach Resort to take out a revolving home equity loan of $100,000 from SunTrust Bank, a second mortgage they paid off in April of this year.
In February 2009, the Druzbicks were served with notice that their Harbour Beach property was facing a foreclosure suit. In the judgment that followed nine months later, the total owed was $138,228. The bank recovered $42,000 of that when the property was sold to a private party in December 2011.
Druzbick said he had multiple approvals from the lender for short sales of the unit that were taken back. As he was preparing one more short sale, he got notice that the bank had sold the unit on the courthouse steps for $42,000, which he said was $30,000 less than what the mortgage company would have gotten from the last negotiated short sale.
While the Druzbicks were going through that foreclosure, they received notice of a foreclosure suit in July 2009 on their Horizons Condominium unit. At the January 2010 judgment on that case, the Druzbicks owed nearly $445,000.
In July 2010, that property was sold by the bank to a private party for $198,500.
The problems with the mortgage company for the Horizon condo were even more convoluted, Druzbick said. The original lender went bankrupt, and mortgage checks the Druzbicks were writing were not going to the new mortgage holder.
Later, as the couple were trying to arrange a short sale on that property, they learned from the title company that the original mortgage holder had falsified information about their income to award them a mortgage that likely should not have been approved, Druzbick said. On the advice of their attorney, the couple allowed the property to go into foreclosure.
When Druzbick, 60, a former member of the Hernando School Board, was running for the District 3 commission seat in 2008, he filed his 2007 financial disclosure. The form listed as assets his home in Hernando County, his second home at 701 S Atlantic Ave. in Daytona Beach, savings, an IRA and life insurance.
His liabilities included the mortgage on his house in Hernando County, his mortgage on the Daytona Beach condo he had listed as an asset, a car loan, the home equity line of credit for his Daytona Beach property and another line of credit from Regions Bank, which Hernando property records tie to his Hernando home.
Nowhere on the disclosure did he mention the Horizons Condominium unit he and his wife had purchased on May 9, 2006, or the mortgage he took out on May 12, 2006, from American Brokers Conduit. Public records indicate that the Druzbicks owned that condo until the final judgment in the foreclosure case in January 2010.
Druzbick said he didn't think he needed to list the Horizons condo or the mortgage taken out to pay for it.
"It was in my wife's name. It wasn't mine,'' he insisted. "My name was on the deed, but the mortgage is in her name.''
After looking at a copy of the deed with his name on it and the mortgage, which has both his name and his signature, he said, "It should have just been in her name. My finances had absolutely nothing to do with securing that mortgage.''
He said he disclosed "what I though I was legally obligated to do,'' adding that if disclosure should have been made on the Horizons condo, "it's my mistake.''
Druzbick's 2007 disclosure form does not list any rental income, only his $66,350 salary from his business, Custom Discount Blinds. He said that was because, although the Harbour Beach condo was to have been an investment, he spent more on it than he got out of it.
"We never made a profit," he said. "It was always a loss."
It didn't help that the building where the unit was located was damaged by a hurricane after he bought it, he said, making it difficult to rent. And the condo complex never recovered enough from its insurance to cover the damage, so unit owners paid a large assessment, he said.
He said he and his wife never intended to rent the Horizons condo.
Druzbick said he always has loved the water, and that buying and selling the condos in Daytona Beach allowed him to dabble in two of the things he enjoys — motorcycles and home improvements.
For a while, he said, he and his wife were doing well. But in the long run, "it was an investment that did not work well for us, just like it did not work well for a lot of people,'' he said.
Druzbick said his record as a county commissioner should stand and that Hernando County taxpayers should not be worried about his ability to manage their tax dollars.
"I think I've proven that. I think I've proven that with the initiatives that I've put forward,'' he said. "This was a bad investment like anybody else's bad investment.''
According to the rules of the state Ethics Commission, public officeholders and candidates for those offices must file a form that includes "a detailed disclosure of assets, liabilities and sources of income over $1,000 and their values as well as net worth.''
It does not initiate an investigation of violations unless someone files a complaint.
There are no criminal penalties for violations. Civil penalties up to $10,000 can be imposed, and an official can be impeached, removed from office or employment, suspended, censured, reprimanded or demoted, according to the Guide to the Sunshine Amendment and Code of Ethics for Public Officers and Employees.
An official's salary can be reduced, and candidates can be removed from the ballot.
Druzbick faces a challenge in the Republican primary in August from Jason Patrick Sager. Other candidates in the November general election are Democrat Diane Rowden, Greg Sheldon, a no-party candidate, and write-in candidate Tanya Marsh.
Barbara Behrendt can be reached at firstname.lastname@example.org or (352) 848-1434.