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Habitat for Humanity says it plans to buy back mortgages sold to house flipper

Joann Salas and her husband John Clay, 83, pose in front of their Habitat for Humanity hom that they helped build 15 years ago. Theirs was among the mortgages Habitat 's Hillsborough affiliate recently sold to a company with a history of buying and flipping foreclosed houses. [OCTAVIO JONES | Times]
Published Aug. 14, 2018

TAMPA — Habitat for Humanity of Hillsborough County said Monday that it will seek to immediately buy back 12 mortgages that it had sold to a Tampa company with a history of flipping foreclosed houses.

The announcement came a day after the Tampa Bay Times reported that the company, Southeast Property Acquisitions, already tried to get at least one of the affected homeowners to deed over her house in lieu of foreclosure and that others feared the company would try to take their homes, too.

"Oh, that's wonderful!" homeowner Joann Salas said on hearing the news.

"That tells me (Habitat) did something totally wrong," said another owner, Danetta Moore. "Sure, some of it is our fault, but I hope they (at Habitat) are willing to work with us more instead of throwing us away as they did."

EARLIER COVERAGE: They trusted Habitat for Humanity. Then it sold their mortgages to a Tampa company that flips houses

In separate statements released Monday afternoon, both Habitat International and the Hillsborough affiliate said the transaction was at odds with Habitat policy that permits the sale or transfer of mortgages only to banks and other regulated financial institutions.

"Habitat of Humanity International supports Habitat Hillsborough's effort to repurchase these mortgages," said Bryan Thomas, a spokesperson for the parent organization.

In the Hillsborough affiliate's release, CEO Tina Swain said that the sale to Southeast, while legal, was counter to policy.

"We apologize to the affected homeowners for any confusion brought about by the sale of these mortgages, and any failure on our part to communicate the transfer adequately with them," her statement said.

Although borrowers are supposed to be notified at least 15 days before their loans are sold or transferred to a new servicer, Habitat Hillsborough sent the homeowners letters dated June 29 saying their mortgages had been sold that day. Salas already had sent her payment to Habitat, causing her to be late on her first payment to Southeast Property Acquisitions.

Swain said she could not comment on individual cases for privacy reasons but said that many of the mortgages sold to Southeast "have faced significant payment shortfalls" in the past.

"We have worked with each of the homeowners in accordance with our policies, communicating with homeowners frequently once they became delinquent in payments… and seeking modification and payments plans whenever appropriate with the goal of keeping these homeowners in their homes," Swain said in the release.

"If we are successful in retaking possession of these mortgages, we will resume our work with the homeowners and work within the terms of the mortgages to address any shortfalls in their mortgage payments," Swain said.

Southeast could not be reached for comment on whether it will sell back the mortgages.

For nearly a half century, the non-profit Habitat for Humanity has been helping low-income Americans become homeowners. Habitat homeowners must spend hundreds of hours helping build their houses in return for a deed and a zero-interest mortgage. Like most lenders, Habitat affiliates sell their mortgages to raise money for more houses but it has typically sold only to well-known banks.

The sale to Southeast prompted a torrent of criticism. Southeast has bought and flipped almost 240 foreclosures in the last five years, and obtained final judgments of foreclosure against six Habitat homeowners whose mortgages it bought in 2014.

Tonya Neal, whom Southeast tried to pressure into deeding over her house, said she had mixed feelings about the potential buyback.

"I'm happy but I'm kind of nervous about how it all happened in the first place,'' she said during a break from work as a health-care aide. "I don't mind working with Habitat but I hope something good comes of it.''

Contact Susan Taylor Martin at smartin@ tampabay.com or (727) 893-8642. Follow @susanskate.

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