Article Courtesy of The Tampa Bay Times
By Susan Taylor Martin
Published November 14, 2019
INDIAN ROCKS BEACH —
Joseph Erickson owned a condo in this
beachfront community but the view was of the
Intracoastal Waterway, not the beach. So
when he saw that a gulf-front condo in a
nearby complex was up for sale at a
foreclosure auction, he decided to try his
luck.
On Sept. 23, 2018,
Erickson won out over several other bidders and bought the
condo for $385,000. He knew that $35,000 would go to the
Happy Fiddler Condominium Association, which had filed the
foreclosure case to collect unpaid dues. But he expected
Pinellas County’s Clerk of Court would return the $350,000
"surplus'' to him. Erickson hired a contractor and started
renovating his new condo.
Then came two shocks. Erickson hadn’t done a title search,
so only after the auction did he learn that there was a
$350,697 mortgage on the property. After getting over that
jolt, he figured he had enough in the surplus funds to pay
off the bank before it too foreclosed.
But Erickson never received the $350,000 surplus. A company
called Locations of Pinellas Inc. claims that it is the
condo’s true owner and asked the clerk’s office to give it
the money. Erickson’s attorney filed an emergency motion to
block the release but that sparked a legal battle that pits
Erickson against a man who spent four years staving off
foreclosure on a $1.6 million Tierra Verde mansion in which
he had been living rent-free.
"The first time I do this, it blows up in my face,''
Erickson, 53, said of his foray into foreclosure auctions.
"It’s devastating, it’s life-changing. As far as any thought
of retirement, that’s out the window.''
Foreclosures have dropped dramatically since 2013, but there
still are enough properties being auctioned to attract the
attention of people looking for a good deal. And that means
there are still situations where a bidder who doesn’t fully
understand the process can get hammered despite warnings the
clerk’s office posts on the auction site. |
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Joseph Erickson, 53, won a foreclosure auction for a
condo at Happy Fiddler Condominiums in Indian Rocks Beach last year
only to have a man claim he is the true owner of the property and
should get the $350,000 that Erickson has already paid for the
condo.
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The Happy Fiddler case began in 2010 when the condo association sued a woman
who owed $14,458 in dues on her unit. A final judgment was issued in 2013
and a foreclosure auction was set, but Locations of Pinellas, Inc.
intervened.
The company, started by Samuel W. Ballinger, said that the city of Madeira
Beach had given it the right to foreclose on code violation liens the woman
had run up on properties she owned in that town. Those liens took priority
over the condo lien, the company argued in getting the Indian Rocks Beach
condo auction cancelled.
Eventually, the condo association and Locations of Pinellas reached an
agreement whereby the company paid at least part of the rapidly mounting
delinquent dues, records indicate. Locations got title to the condo in a
2016 foreclosure sale and continued paying the dues for a "period of
months,'' a court filing said. Then Locations defaulted, prompting the
association to sue it and setting the stage for the 2018 auction at which
Erickson was the winning bidder.
During this time, Ballinger was living in an exclusive gated community on
Tierra Verde. The owners had gone bankrupt, and a bankruptcy trustee had
sold the run-down, heavily mortgaged property for $8,500 to a buyer who then
deeded it to Ballinger. When the bank started to foreclose, Ballinger
declared bankruptcy, which automatically stops a foreclosure. He listed
himself as an unemployed mechanic with no assets and just $1,000 in monthly
income provided by a relative.
"In truth, Mr. Ballinger was certainly, and may still be, a player in the
purchase and management of distressed real estate,'' according to an order
and memorandum from the United States Trustee’s office. "He drove a Ferrari
and a Maserati. He operated numerous corporate entities, including one that
he used potentially as a personal piggy bank.''
As officials tried to put together an accurate picture of his business
interests, Ballinger failed to appear for hearings, provided "dribs and
drabs of information sprinkled with misleading bits of information'' and
concealed records to the point that the court had to issue "a blanket of
subpoenas to all major banks in the Tampa Bay area.''
In short, "he is a sophisticated businessman whose courtroom demeanor
suggests that he is highly intelligent, business savvy and not unaccustomed
to delivering a compelling sales pitch,'' the order said in denying
Balllinger’s petition to have his debts forgiven.
Regions Bank foreclosed on the Tierra Verde house in 2017, and sold it last
year for $1.25 million. Ballinger, who said the Tampa Bay Times had done a
"hatchet job'' in a story on that house, said he didn’t want to talk about
the Happy Fiddler condo case.
Erickson, who owns two fitness centers, said the money he invested in the
condo was his retirement savings. On Wednesday, he and his attorney will ask
Pinellas County Circuit Judge Keith Meyer to vacate the 2018 auction and
order the release of the $350,000 surplus. Erickson, who has been in talks
with the lender, said he will pay off the mortgage and keep the condo if he
wins.
If he loses, he will walk away from his gulf-front dream home and Locations
of Pinellas will get the $350,000.
Regardless of what happens, Erickson figures he is out the $64,000 he
already has spent — on attorney’s fees, property taxes and the renovations
that he started. He also owes the condo association about $7,000 in dues he
stopped paying on his attorney’s advice when the case went into litigation.
"My fiance and I have been jumping through all these hoops and hoping it all
to end on Wednesday,'' Erickson said. "My ultimate goal is so other people
don’t run into this same con.'' |