TAMPA — A Tampa company with a history of flipping houses says it plans to keep 12 mortgages it bought from Habitat for Humanity of Hillsborough County despite the nonprofit's desire to buy them back.
Southeast Property Acquisitions "rightfully owns and holds all of the problem loans and has every intention to be made whole on its investment," a lawyer for the company said in a letter to the Tampa Bay Times.
Southeast's intention to keep the loans presents a new problem for Habitat Hillsborough, which had said it would try to get them back in the wake of an outcry over the sale. As the Times reported, one homeowner said Southeast tried to pressure her into deeding over her house in lieu of foreclosure while other owners say they feared losing the houses they helped to build.
Tina Swain, CEO of Habitat Hillsborough, said Monday that the affiliate still hopes to help the homeowners but it "will take days to find a solution.''
Anthony Brooks, chair of the affiliate's board, did not return calls for comment. He told the Times' editorial board last week that Southeast got involved through a contact he had with a Realtor he declined to name.
Many if not all of the loans Southeast bought June 29 were in default although Habitat had not begun foreclosing. Several of the homeowners said they didn't know how much they were in arrears and thought Habitat would tack any late payment amounts on the end of their loans.
In his letter to the Times, attorney John A. Anthony alluded to the confusion over the amounts owed.
"Our client (Southeast) made good faith attempts to rectify Habitat's unclear accounting on the loans and is now being vilified for presenting what it believes is accurate delinquency," the letter said.
Habitat for Humanity helps low-income Americans become homeowners. They 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 get money for more houses but the Hillsborough affiliate acknowledged it violated policy by selling the 12 mortgages to a company that is not government-regulated.
In his letter, Anthony said "nothing seemed out of place" when Habitat approached Southeast about buying the loans. Since the earning power of the homeowners "is quite limited," the letter said, the company assumed a risk in taking over the loans.
"Habitat conversely avoids risk and is able to cuts its losses and avoid the community optics associated with collecting debt from the very objects of its charitable activities," the letter said. "And to be sure, the agreement leaves no doubt but that the debt being acquired by (Southeast) is valid and enforceable."
The company, though, did seek to work out the debts or pay cash for the equity some of the homeowners might have, the letter said.
With Southeast keeping the loans, one option would be for Habitat Hillsborough to pay off the mortgages. It would then issue new mortgages.
"I just think it's a travesty that this has happened and it is incumbent upon Habitat to do everything it can," said Arthenia Joyner, a former state senator from Tampa. "I am shocked that it would not have thought about the consequences of selling these mortgages."
Records show that the 12 mortgages totalled $750,000 at the time of issue. All have been paid down to varying degrees so the payoffs would be less.
Southeast and Habitat Hillsborough have not said how much the non-profit received for the mortgages. Jon Coats Jr. , a St. Petersburg real estate lawyer, said loans typically sell at a discount, which could range from 10 cents to 90 cents on the dollar.
"It's really going to depend on the value of the property and the collateral and your ability to recover the debt," he said.
A lender must accept the payoff amount although it is entitled to legal fees and costs incurred in recovery efforts, Coats said.
On Monday, the affected homeowners filed a complaint with the federal Consumer Financial Protection Bureau saying Habitat had not given them the required 15 days notice that it was selling their mortgages.
Contact Susan Taylor Martin at firstname.lastname@example.org or (727) 893-8642. Follow @susanskate