Concluding city of Miami CFO Larry Spring's mortgage misadventures...

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It's been a busy couple of weeks, let's take a moment to revisit city of Miami CFO Larry Spring's purchase and subsequent mortgaging of his mother's home that was located at 14421 Polk Street.  We previously outlined Mr. Spring's purchase of the home in question for $150,000 back in December of 2004 financed by a mortgage from Peninsula bank for $147,682.  We then discovered that just two years later Mr. Spring refinanced the house for $191,250 through a mortgage from WMC mortgage presumably netting upwards of $43,000.  It's this mortgage that went into default and caused the subsequent foreclosure that was filed just two years later.


Moving on, we then found that Mr. Spring may not have lived in the house when he purchased it and when it was later refinanced.  According to court records, Mr. Spring lived in a Brickell condo throughout the period of time he purchased the Polk street home.  

This could create a problem for Mr. Spring if he indicated that the Polk Street home was his primary residence when he financed it.  Let's take a look at the occupancy requirements for the first mortgage...

That's pretty clear, the "borrower shall occupy, establish and use the property as borrowers principal residence within sixty days after the execution of this security instrument".  Let's move on to the second loan where there's actually a spot where Mr. Spring could have indicated that the home was not his primary residence...

As an abundance of caution, let's see if there's an occupancy requirement on this loan as well...

There you have it.  In both instances Mr. Spring clearly represented that the home he was mortgaging was his primary residence in order to enjoy a lower interest rate that he would not have been able to obtain if he had identified the home as a second home or investment property. 


So what's the point?  What did Mr. Spring do that was any different than anyone one else during the real estate boom?  What's the big deal about lying on your mortgage application and the subsequent mortgage docs?  If Mr. Spring was indeed living elsewhere and misrepresented to the lender that this home was his primary residence then this is a clear cut case of mortgage fraud.  The same type of mortgage fraud that the feds used to go after the Plantation Cops and countless others over the last few post real estate boom years.  Although the residency issue may seem trivial, it's this minute detail that's allowed law enforcement to charge otherwise innocent people with mortgage fraud.  In this instance it's even worse as the person who didn't make the proper disclosures to the bank is none other than the Chief Financial Officer of the City of Miami, if he can't be honest with his own bank, then how the hell can we expect him to be honest when it comes to the financial affairs of our city?