home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.loan-academy.com/
twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.


Good News Turns Bad for Investors of Defunct Company

Cash, debt rises for Brasota

July 19, 2005

By PATRICK CROWLEY


It is a classic "good news, bad news" scenario for investors of failed Florida mortgage lender Brasota Mortgage Co.

Bankruptcy trustee Gerald McHale has confirmed in an e-mail to MortgageDaily.com that he has received a $4.2 million payoff from Florida developer William Manfull and his company, Manatee River Community Development.

That brings Brasota's cash to $34 million, up from $21 million when the bankruptcy was filed in February.

Manfull has told McHale he would payoff another $2 million in loans during the next three weeks.

But on the Brasota Web site, McHale writes that losses, which were originally believed to be about $20 million, may now be as high as $60 million.

McHale pulls no punches in a posting on the Brasota Web site, www.Brasota.com.

"There are slightly in excess of $100 million in assets and slightly less than $140 million in liabilities," he writes. "Be aware that the $100 million assets are 'soft' and do not take into account the probability that the assets recorded by the company might be questionable.

"Even those assets that are not questionable could be potentially uncollectible," he said. "The company had done no collection efforts on its portfolio of approximately three years. Suffice it to say...that losses 'exceed $38 million'. Total extent of the losses may well go into the $50 or $60 million range."

Brasota, which has been described as a Ponzi scheme, owes nearly 1,800 investors $138.5 million.

Brasota, based in the Gulf Coast Florida city of Bradenton, was a residential and commercial mortgage broker and lender that offered investments backed by mortgage loan real estate collateral.

"We are unable to conclude that any assets have been misappropriated, but it appears that new note holders have been paying the agreed upon return for existing note holders," accountant Rene Zarate wrote in an affidavit that was included in a lawsuit that placed the company in a court-ordered receivership.

"In other words, it appears new note holders have been funding the operating deficits on a monthly basis for an indeterminate amount of time," Zarate said.

On the Web site, McHale said he has turned about 40 loans totaling $5.8 million over to attorneys for collection.

"I think it's conceivable that we will continue to turn files over to them for collection at the rate of about 10 files per week," he said.

McHale said he is not seeking to bring the loans "current" but instead wants them paid off immediately or foreclosed on.

"We have already brought a number of foreclosure suits and these actions will rise dramatically as we progress in the 'clean-up" process," he said.

Record keeping was shoddy and has delayed the collection process, McHale said.

"The company records of payments, tracking mortgage balances and past due items was totally inadequate and in man cases, non-existent," he said. "How much more of this we'll find, I can't be sure. All I can say is that it is a time consuming and tedious process and we're moving through the process one file at a time."


Patrick Crowley is a MortgageDaily.com feature journalist and blogger, and a reporter and columnist for The Cincinnati Enquirer. e-mail Patrick at: [email protected]

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders