Short-sale firm Nationwide hit with HOA liens

Article Courtesy of The Palm Beach Post

By Kimberly Miller

Published May 10, 2012

A Palm Beach County foreclosure-rescue company is acquiring distressed homes and renting them out, but some home-owners association leaders say it's not paying the dues vital for community upkeep.

The for-profit Nationwide Investment Firm, which recently moved its Boca Raton headquarters to a Flagler Drive office in downtown West Palm Beach, has homeowners quit claim-deed their properties to the company with promises to broker a short sale, while also defending the case in court.

Homeowners, who remain on the hook for the mortgage while no longer owning the home, have filed several lawsuits against Nationwide, complaining they unwittingly gave away their property without receiving the help they sought.

And community associations say there's a deeper ripple effect in neighborhoods where Nationwide seeks to put tenants in homes without association approval or paying fees required for maintenance, security, landscaping and other services.

Associations trying to recoup delinquent fees have filed tens of thousands of dollars in liens against Nationwide and properties deeded to the firm.

Florida property appraiser records show Nationwide owns 73 homes in Palm Beach, Broward, Miami-Dade, Collier, Lee, St. Lucie and Highlands counties.

Didn’t know condo she rented was in foreclosure: Brittany O’Bair paid a $900 deposit to Nationwide and moved into a Palm Lake condo when she learned the company hadn’t sought HOA approval and owed $2,300, according to a lien.


Nationwide President Guilfort Dieuvil, a licensed Realtor, said his company is working with the associations to settle the bills.


"We are doing a negotiation with the HOAs, plain and simple," he said.


But at least one attorney for the Whitehall Condominiums of the Lands of the President said he hasn't spoken to Nationwide in months. Whitehall has a unit in foreclosure that was deeded to Nationwide in May 2011.


"Early on we were in touch," attorney Larry Mesches said, but there was no resolution.

Mesches has so far blocked the company from putting a tenant in the home off North Congress Avenue unless it allows the association to directly collect the rent until back dues are paid off. A lien was filed against the unit for $6,831 in June 2011.


Other associations have had Nationwide tenants move in without association approval.

Brittany O'Bair said she didn't find out until after she put down a $900 deposit and settled into a home at the Palm Lake condominiums that Nationwide hadn't sought approval from the association and owed more than $2,300 in delinquent fees, according to a lien filed in September.

"When I told the association manager what unit I was living in, she was shocked," O'Bair said. "She said, 'You're not even supposed to be on this property.' "

Tenant calls the sheriff.


After learning about the issues with the association, O'Bair filed a report April 4 with the Palm Beach County Sheriff's Office, telling a deputy that she feared she was the victim of "some type of fraud" and that Nationwide threatened to kick her out because she wouldn't give it her Social Security number.


"It appears at this time that this property is still in a state of foreclosure; however, the Nationwide Investment Firm has the title in their name and is possibly collecting rent from unsuspecting renters while the properties are in foreclosure," the sheriff's report notes.


Nationwide later refunded O'Bair's $900 and she found another place to live.


In Palm Beach and Broward counties, liens totaling more than $36,000 have been levied against Nationwide by community associations, according to county records.


The Florida Department of Revenue also filed a $13,361 claim against Nationwide in December in Broward County for unpaid documentary stamp taxes.


Ron Kaniuk, an attorney who specializes in community associations with the Boca Raton-based law firm Sachs Sax Caplan, said someone taking over a deed becomes responsible for paying association fees, both going forward and past-due amounts.


Florida Statute 720.3085(2)(a) states that "a parcel owner, regardless of how his or her title to the property has been acquired, is liable for assessments that come due while he or she is the parcel owner." The law goes on to say in the next section that "a parcel owner is jointly and severally liable with the previous parcel owner for all unpaid assessments that came due up to the time of transfer of title."


The association liens range in amounts from several hundred dollars to $12,598 on a Green Terrace condominium unit that was deeded to Nationwide in June 2011. Green Terrace, which is off Belvedere Road in West Palm Beach, filed for foreclosure against Nationwide April 2.


"As far as we're concerned, Nationwide is the owner of the property now," said Scott Stoloff, an attorney representing the association.

Stoloff said his firm sent Nationwide a letter in January notifying it of the amount due and that a lien would be filed. In March, the lien was filed and another letter sent, but Stoloff said he has no notes on the case saying Nationwide has contacted the firm to resolve the matter.

The Garden Hills Home Owners Association filed Jan. 6 to foreclose on a Nationwide home deeded to it in July 2011. Association President Bruce Berg said people are renting the house, but no one has paid the $100-a-month dues in two years.

"It's a very reasonable fee," said Berg, whose community is off Forest Hill Boulevard.

Company faces suits

The Palm Beach Post first reported on Nationwide in November when five lawsuits within a year's time accused the company of fraud. Two more homeowner lawsuits have been filed since then, and there have been several homeowner complaints sent to the Florida Attorney General's Office.

The Florida Office of Financial Regulation said on Monday that it is investigating the company. The Palm Beach County State Attorney's Office had no comment when asked if it was looking into the company, said spokeswoman Christine Weiss.

Kevin Fabrikant, a Hollywood­-based attorney who began representing Nationwide in the fall, has defended its quit claim practices, saying homeowners are explained the plan in both Creole and English. Because Nationwide advertises on Haitian television and radio stations, many of its clients speak Creole as their first language.

Fabrikant has since withdrawn from Nationwide's cases, telling The Post he had "irreconcilable differences" with the company.

Most of the lawsuits against Nationwide are from homeowners who describe questionable short-sale business models, but unsuspecting renters can also get caught up in the deals.

O'Bair, the Palm Lake tenant, said she didn't know the home was in foreclosure with Bank of America, which had filed the action in March 2010 - nearly nine months before the owner deeded it to Nationwide, according to Palm Beach County official records.

Short sales declined

In March - two years after the initial foreclosure action - Nationwide filed to intervene in the foreclosure case, saying Bank of America must name it as a party to the suit and that it is negotiating a short sale on the home.

Bank of America told The Post that it has declined a number of short-sale offers on the Palm Lake home, including ones rejected because they came from Nationwide itself or an affiliated group.

"As long as these offers involve the company currently named on the title, they are not arm's-length transactions and will be declined," a spokesman said. "We continue to monitor and evaluate this situation."

Most major lenders require an "arm's-length" affidavit be signed at closing that says the short-sale transaction has been negotiated by unrelated parties, who do not share business or familial relationships, and that there have been no prior agreements for the owner to remain in the property as a tenant or to regain property at any time after the sale.

Home sold at auction

In one Palm Beach County lawsuit, a woman said she gave Nationwide a $46,500 deposit in May 2011 to buy a home in the Wycliffe Golf and Country Club but didn't know that it was in foreclosure, that there is a required $58,000 club membership, or that it hadn't been obtained by the firm in a traditional sale. The home also had a $4,782 lien against it from the community association.

The owner of the Wycliffe home, Moshe Schuldinger, said he deeded it to Nationwide to facilitate a short sale.

The home was sold at a foreclosure auction April 9. Nationwide filed an emergency motion to cancel the sale April 6, saying it had not received notice of a foreclosure as the owner of the property and that it was conducting a short sale, but a certificate of sale has already been issued to the highest auction bidder.

"Nationwide is unbelievably brazen," said Alan Meltzer, president of the Forest Condominium Homeowner Association, which filed a lien against Nationwide on April 19 for unpaid dues on a unit deeded to the firm in April 2011. "The title transfer didn't go through the HOA and we have a right to know who is living there."

Nationwide filed to evict the Forest condominium tenant in March, according to court documents. Bobby Morrero had moved in a year earlier and was paying the association his rent directly to make up for delinquent dues on the unit. He said he agreed to move out.

"It was a terrible experience," Morrero said.