Article Courtesy of The Tampa Bay Times
By Susan Taylor Martin
Published August 27, 2017
Pinellas County Circuit Judge Jack St. Arnold on Monday
threw out the $458,100 sale of a gulf-front condo because of what he called
an "unscrupulous" and "conniving" scheme to trick bidders at a foreclosure
His ruling means that the owners of Orlando Realty Group will get back the
money they bid on what turned out to be a second mortgage held by a company
connected to Clearwater attorney Roy Skelton. Only later did the bidders
discover that a different lender had a superior first mortgage and could
soon foreclose, leaving them with no condo and out nearly a half million
While he rapped Orlando Realty for not doing sufficient
due diligence before bidding, St. Arnold had especially
harsh words for Skelton.
"Clearly you set a trap for unwary buyers," the judge said.
Skelton said after the hearing that he would either sell the
unit in the Ram-Sea Condominiums on North Redington Beach or
try to pay off the first mortgage.
"While I respectfully disagreed with the judge's decision, I
will respect it and will not file an appeal," Skelton said.
Two years ago, Skelton's Outbidya, Inc. paid $157,8000 for
the condo at a homeowners association foreclosure auction.
Last year, shortly after Wells Fargo began foreclosing on
the first mortgage, Skelton created Deutsche Residential
Mortgage — no relation to the giant German bank — and took
back a second mortgage from Outbidya.
In February, while Wells Fargo's case dragged along,
Skelton's Deutsche obtained a final judgement of foreclosure
on its second mortgage and set the stage for the contested
Pinellas County Circuit Judge Jack St. Arnold
questions John Houde during Monday's hearing on a motion to
invalidate the sale of a $458,000 Redington Beach condo.
The sole witness at Monday's hearing — which was held on an emergency motion
to set aside the sale — was John Houde, who owns Orlando Realty Group with
Houde testified that he thought the auction involved a first mortgage
because the only lis pendens — initial notice of foreclosure — he saw was
filed by Wells Fargo. Before bidding, he said, he reviewed public records
including the docket in the bank's case.
"I've done quite a number of these," Houde said, referring to online
foreclosure auctions. "This (review) is to make sure which mortgage is
But under questioning from Skelton, Houde acknowledged that he had not read
the entire final judgment, which showed that Deutsche Residential held the
mortgage being foreclosed. Skelton also accused Houde of committing fraud by
indicating in the online auction process that he had thoroughly read all
documents in the case even though he had not.
"He comes with unclean hands," Skelton said.
Skelton and Matthew Weidner, one of Houde's lawyers, traded sometimes dense
legal and technical arguments in the 90-minute hearing — which included a
brief recess to watch the eclipse. But another of Houde's attorneys, Jon
McGraw, was more straightforward in his remarks.
"It's a very cunning plan by Mr. Skelton and his group," McGraw said and one
in which Orlando Realty "stands to lose a substantial amount of money."
Before ruling, St. Arnold said Houde's company had failed to do its due
diligence "in a competent manner," and added that he had little sympathy for
bidders at foreclosure auctions who "pick on the bones" of people who lost
But, calling it a case of "complicit versus conniving," the judge said in
effect that he found Skelton's actions much more egregious. The mortgage
company Skelton set up "was not a legitimate lender," St. Arnold said, and
its sole purpose was to further a scheme to reap "an unconscionable profit."
Skelton, who conceded that his Deutsche Residential never made a single
loan, is involved in a similar case in which a person thought he was bidding
on a first mortgage on a Largo townhome owned by another of Skelton's
companies. That buyer forfeited a $5,000 deposit rather than go through with
the $112,000 purchase.
Despite the judge's criticism of him, Houde was relieved to be getting his
"You shouldn't be allowed to create a scheme to defraud buyers," he said.