Warehouse full of booze

Harvey Allen of Somerville-based liquor wholesaler M.S. Walker recently bought a 390,000-square-foot warehouse in Norwood, laying down $9.2 million to buy the facility. The warehouse at 750 Everett St. belonged to Morris Holdings since early 2005, the same year that M.S. Walker reportedly leased the building to begin using it as a distribution facility.

Bay State Ahead of ‘Buy and bail’ scam

"Buy and Bail" fraud was popular during the last economic downturn 20 years ago, and a few mortgage brokers have wondered aloud whether they’ll be seeing a revival of the scam, now that the market is flooded with foreclosed homes. It sounds simple: a homeowner buys up another house – often cheaply, at auction – and moves in, but stops paying the mortgage on their previous home, which slides into foreclosure.

As it often happens, the homeowner will actually get a new mortgage for the new home, claiming that they’re planning to rent their old home and use that rental money to pay their new loan. They don’t rent out their home, which goes into foreclosure. Of course, the lender gets screwed.

But Massachusetts has a line of defense. It’s one of the states that allows lenders to recover costs from borrowers after the home has gone into foreclosure. In many other states, the lender cannot do so, and the borrower is generally guaranteed no ramifications except for a damaged credit score, said Jenny Brawley, a mortgage fraud investigation manager with Freddie Mac.

Those states without such allowances also happen to be the states where buy-and-bail runs rampant, and Brawley said although official numbers weren’t readily available, she’s seen an uptick in such scammers nationwide. 

In response, Freddie Mac has put in new underwriting requirements to dissuade fakers from trying to scam lenders: Starting this year, the rules require 30 percent equity in the former house – the one being converted into a rental – plus a fully executed lease and security deposit to document that the borrower is actually getting that rental income.

Citi’s a laughingstock

It’s nice to be able to laugh during financial times such as these – especially if it’s at the expense of someone who’s worse off than you are. As financial woes rock the U.S.’s enormous financial companies, the one giant that local guys snicker at the most seems to be Citigroup. People just can’t resist throwing an elbow into the sick man’s ribs.

At last week’s NAIOP briefing, Berkeley Investments President Young Park was detailing his $550 million CitySquare project in Worcester. Berkeley is getting $94 million in city, state and federal funds for the new streets and sidewalks. A portion will come from bonds, he said, while the rest "is sitting in a bank in Worcester somewhere," waiting for Berkeley to break ground. Park paused, grinned and added, "I think – I hope – that it’s not in Citibank."

The week before, at a Colliers, Meredith & Grew market briefing, Theodore J. Chryssicas forecast the fortunes for retail in 2009. It wasn’t pretty. And because it won’t be pretty, he said, landlords should start settling for less-than desirable tenants, even ones with questionable credit. At that point, one audience member whispered to another, "You mean, like Citibank?"

So Long, LONGMEADOW

Author Anita Shreve has shed her Longmeadow home, selling off the nine-room colonial a few months after buying a condo in Boston‘s Back Bay. The bestselling writer of "The Pilot’s Wife" and "The Last Time They Met" sold off the home at 734 Longmeadow St. for $1.6 million, after having owned it since 2000. As of the property’s last assessment in 2008, it was worth about $835,000. As for her new digs, Shreve bought her condo at 6 Arlington St. for $1.6 million in November.