Taking a closer look a City of Miami Assistant Fire Chief Veldora Arthur's alleged mortgage fraud misdeeds.

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It looks like the Miami Herald finally got around to reporting on City of Miami Assistant Fire Chief Veldora Arthur's federal mortgage fraud indictment.  From the Herald article...

The indictment says Arthur received a payoff yet had no intention of living on the properties, which eventually went into foreclosure.

Ok, textbook definition of a "Straw Buyer".

Arthur’s attorneys dispute the charges, saying their client actually went to the feds not long after the 2006 purchases took place, and after a friend noticed the paperwork said she was making $123,000 a month, not a year.
Bieber called his client “a victim” who “unfortunately associated herself with people who were committing fraud.”

Victim?  Really?  She had no idea what was going on?

Bieber said that even though Arthur was able to purchase the properties with no money down — a move he said was fairly common during the boom years of the real estate market — she received a payment after the properties closed. 

Hold up, her attorney is admitting that she received payment once the properties closed?  That in of itself isn't proof that somethings wrong?  Isn't the seller supposed to get paid once the property sells rather than the buyer?

Bieber said Arthur was introduced to Fagan through a friend, and was simply looking to make an investment. The plan was to flip the properties for a profit, but, Bieber said, there was no profit because the properties went into foreclosure.
“She believed this was an honest investment during the real estate boom,” said Bieber.

Wait a minute, the attorney is now claiming that Ms Arthur was "was simply looking to make an investment", just a few moments ago he clearly stated that his client was able "to purchase the properties with no money down" and "received a payment after the properties closed".  Once again, isn't this the textbook definition of a "Straw Buyer"?

After examining the indictment a little closer, we've found that all the homes that were used in this mortgage fraud scheme were in the same building located at 3370 NE 190th street in Aventura.  

From the looks of it, the people who orchestrated this scheme found a sweet spot in this condo, units that would appraise high but for one reason or another were having trouble selling on the legitimate real estate market, no different than the sweet spot that John Romney and crew found in the West Grove where they were able to bust out several homes raking in millions of dollars in profits.

Now, let's take apart this mess and see what we can find.  We'll begin with the deeds for the two condos that Veldora purchased, first unit 3111...

veldora arthur warranty deed for 3370 NE 190th street unit 3111 aventura flo 33180

From the documentary stamps we figure the purchase price of this property to be $1,950,000.  That's seems like a ton of money for a 2,720 sqft condo!  Regardless, let's take a look at the warranty deed for unit 3711 in the same building...

veldora arthur warranty deed for 3370 NE 190th street unit 3711 aventura flo 33180

DAMN!  Based on the doc stamps that unit was purchased for a cool two million dollars, same unit as 3111 just six floors higher.

Now, let's look at the mortgages for Unit 3111 begining with the first mortgage for $1,462,500...

veldora arthur first mortgage for 3370 NE 190th street unit 3111 aventura flo 33180

And now the second mortgage for $349,050 on the same property...

veldora arthur second mortgage for 3370 NE 190th street unit 3111 aventura flo 33180

Now, let's move on to the second condo, unit 3711.  Here's the first mortgage for $1,365,000...

veldora arthur first mortgage for 3370 NE 190th street unit 3711 aventura flo 33180

And the second mortgage for $292,500 on the same unit...

veldora arthur second mortgage for 3370 NE 190th street unit 3711 aventura flo 33180

So far so good, let's summarize...

• Unit 3711 purchased on February 7, 2007 for $2,000,000 financed by two mortgages totaling $1,657,500
• Unit 3111 purchased on March 6, 2006 for $1,950,000 financed by two mortgages totaling $1,811,550.

Based on the purchases prices we were able to deduce that means there was a shortage of $480,950 between the two transactions, Ms. Arthur's attorney stated that she put no money down, so who did then?  To further complicate matters, Ms. Arthur turns around a refinances unit 3711 just five months later for a cool $1,680,000...

veldora arthur third mortgage for 3370 NE 190th street unit 3711 aventura flo 33180

Can you imagine the kind of money the mortgage brokers and title companies must have made off of these transactions?!  We're talking over FIVE MILLION DOLLARS worth of loans not to mention the recording and closing costs!  Yet even after signing what looks like hundreds of pages of documents for these purchases and the subsequent mortgages Ms. Arthur's attorney still claims that...

“She believed this was an honest investment during the real estate boom,”

Let's give her the benefit of the doubt, after all our justice system is based on a presumption of innocence for those who've been charged with a crime.  I'm baffled at the thought that Ms. Arthur, someone whose job at the fire department calls for managing payrolls and procurements, someone that is supposed to have a modicum of financial sense could have thought that this was a good or even honest investment?  The mortgage payments alone for these two properties must have been in the tens of thousands, after all she was borrowing nearly four million dollars at 7 to 8% interest!!  That hardly sound like something someone that has any financial sense would agree to especially when interest rates were as low as they were during the peak of the housing bubble.  Let's not forget qualifying for the mortgages themselves, how the hell did a City of Miami firefighter making $180k per year qualify for four different mortgages for close to four million with within one month of each other?

Something is definitely haywire with the statements that Ms. Arthur's attorneys made to the media today but like I said, she's innocent till proven guilty and should be treated as such.  Let's assume that she had no part in falsifying the documents used to obtain these mortgages, let's even assume that she wasn't really a straw buyer and didn't even get cash back after these transactions closed.  Let's say all of those defenses are legitimate, there is one aspect of these transactions that she's not going to be able to explain away though, has anyone figured it out?  

We'll discuss tomorrow, in the mean time think about this question, what do Veldora Arthur, Commissioner Marc Sarnoff and the Plantation cops that were indicted for mortgage fraud all have in common?