Local foreclosure property featured in national media
|Sex sells media|
The Islander's photo of this house at 5601 Flotilla Drive in Holmes Beach was used by The New York Times in a June 6 story on the current mortgage lending crisis, and by Fox Business Network in its June 11 "America's Nightly Scoreboard" report on the same topic. The property is in foreclosure and will be sold at public auction in July.
The national media came calling to Holmes Beach this month when the house at 5601 Flotilla Drive, where an Internet sex club held a week of parties in 2006, was the focus of a June 6 financial column in TheNew York Times business section and on television on the Fox Business Network’s June 11 “America’s Nightly Scoreboard” program.
In his “High and Low Finance” column, Times senior financial editor Floyd Norris mentions The Islander’s May 17, 2006, story on the Flotilla Drive house when it was reported that a Tampa-based Internet sex club had rented the house for sex parties. TheTimes online edition provided a link to the Islander story. In addition, the Times published The Islander’s photograph of the house with its story.
Norris described the homeowners at that time, Scott and Deanne Hopp, as an example of the practice of “house flipping” prevalent during 2003-06 and the questionable lending policies of mortgage companies such as Countrywide, which financed the Hopps purchase.
According to Norris, the Hopps made no down payment to buy houses such as the Flotilla property because they received 100 percent or greater financing from Countrywide using highly inflated appraisals.
The Hopps, Norris said, would pocket the difference after paying the original sale price, then move on to “flip” another house. And, Norris said, Countrywide continued to loan the Hopps money for new purchases.
As long as home values in Florida continued to rise and home-buying demand rose accordingly, lenders such as Countrywide were more than eager to loan money on speculative purchases, TheTimes article indicated. The Hopps and others could continue to “flip” properties by selling one house after another quickly without worrying about payments.
But this created an “artificial demand” for homes, said Norris, and eventually the housing market collapsed, leaving Countrywide and other lenders on the hook for billions of dollars in uncollected loans - and with properties vastly undervalued from the amount owed.
Norris said he was unable to locate the Hopps, but they have apparently relocated to the Florida Keys, where Scott Hopp advertises on the Internet his Fish Monster charting fishing service.
After Norris’ column appeared, The Islander was contacted by a producer at Fox Business Network for permission to use the newspaper’s photograph for its story on mortgage fraud and defaults. David Asman’s “Buy and Bail” aired June 11, also including the newspaper’s photograph of the Flotilla Drive home.
The show featured two aspects of the lending crisis, people who are trapped with high mortgage payments on once over-valued properties, and people who took advantage of the boom market values to cash out loans and bail out through foreclosure.
Asman’s guest on the show, financial writer Michelle Leder of footnoted.org, previously lived in Holmes Beach and her interest piqued when she saw the Flotilla address among Countrywide’s 1,400 Florida foreclosures.
She wrote about the Hopp’s Flotilla Drive property last November and noted during the Scoreboard interview that with a minimum auction bid of $369,000, it appears the bank will lose more than $700,000. The Hopps originally paid $750,000 and refinanced up to $1.1 million worth of Countrywide loans before bailing on the property.
The Hopps presently have a number of Manatee County properties in foreclosure.