Queries on cozy ties and big loans
By JEFF TESTERMAN and CHRISTOPHER GOFFARD
© St. Petersburg Times,
TAMPA -- In January, Lynne McCarter signed her name at the USF Federal Credit Union for a $230,000 loan to build a spacious home in South Tampa for herself and her fiance and boss, Steve LaBrake.
It wasn't McCarter's first loan. McCarter, a $55,723-a-year city employee, was legally responsible for three mortgages totaling about $225,000.
But McCarter was no stranger to the USF Federal Credit Union. She had one loan there. And the head of the loan department, Lori Roberts, had a business relationship with McCarter and LaBrake stretching back to 1995.
Now, federal investigators are looking into the details surrounding McCarter's luxury home at 3608 W Corona St. and the loan used to build it.
The U.S. Attorney's Office in Tampa on Thursday subpoenaed building records on the W Corona Street property and city personnel files for McCarter and LaBrake.
On Friday, investigators notified the USF Federal Credit Union to expect subpoenas, said credit union president Thomas Ness.
A review of city and property records by the St. Petersburg Times raised new questions about the cozy relationship among Roberts, LaBrake and McCarter:
From 1995 to 1999, Roberts helped handle four USF Federal Credit Union mortgage loans for LaBrake. This year, while Roberts was chief of the credit union loan department, McCarter got her $230,000 home loan despite an apparently marginal financial statement.
LaBrake in 1996 interceded to fire one contractor and hire Ryan Construction Co. to finish renovation of a Floriland area home Roberts was buying with the help of a city-backed Challenge Fund loan. The employee who processed Roberts' loan: Lynne McCarter.
The same year, Ryan was criticized for getting low-income housing work from the city without bids. Later, Ryan handled a $12,000 roof truss job on a house LaBrake built on Davis Islands. Ryan is completing the construction of the W Corona Street home for McCarter at about a third of the cost of similar homes in South Tampa.
In 1998, LaBrake helped push through a city legal agreement that enabled Roberts to get a $26,000 pool loan at the USF Credit Union. The agreement violated several city policies, and not all of the proceeds were spent on the pool.
"There seems to be a history of quote "oversights' where people with special relationships with special friends get special treatment," said Tampa City Council member Bob Buckhorn.
Buckhorn has called repeatedly for LaBrake's suspension while he is under investigation.
"I can't tell you how many people have stopped me on the street and said, "This is crazy. What's going on down there?' " he said.
LaBrake, 50, is the $105,000-a-year director of Tampa's Business and Community Services Department, overseeing all aspects of construction in the city, including low-income housing, code enforcement and building inspection. The father of three is in the midst of a divorce from his wife of 27 years. In January, he listed McCarter as his fiancee and beneficiary of his city deferred compensation.
McCarter, 31, a divorced mother of one, has risen from city clerk to become a loan counselor and top aide to LaBrake. She also is pregnant with LaBrake's child. With the help of excellent performance evaluations by LaBrake, McCarter has seen her city pay rise from $6 an hour to $26 an hour.
Roberts, 38, is a twice-divorced mother of two who is remarried and known as Lori Horne. In 1995, when she sought a city Challenge Fund loan, she was a $21,000-a-year loan officer for the USF Credit Union who had filed personal bankruptcy three years earlier.
Roberts contracted with the non-profit Tampa United Methodist Centers to buy the home at 215 Marham Ave. with Challenge Fund money and a second loan.
Initially, Scott Curtiss Construction was hired to renovate the home, but a dispute arose over a change order on the job. LaBrake fired Curtiss, replacing his $21,453 renovation contract for one with Ryan Construction for $45,7874.
Curtiss sued over the matter and settled. By the time Roberts bought the home for $70,000, more then $90,000 had been put into it.
"It seemed someone was getting favored treatment on that house," Curtiss said last week.
City rules ignored
In 1998, Roberts called the city and asked for help in getting financing for a pool at her home on Marham Avenue. Roberts wanted to borrow $26,000 from the USF Credit Union, but had two mortgages through the city.
Roberts asked if the city would agree to subordinate its second mortgage to the credit union's loan. Though that subordination violated guidelines designed to protect the city's interests, LaBrake pushed through the request.
City guidelines say a subordination agreement should not move the city's collateral position from first to second or from second to third. That increases the risk for the city: In the event of a foreclosure, whoever has the first mortgage has the first claim on proceeds from a sale.
Vernell Savage, the manager of the city's community redevelopment agency, acknowledged the deal was unusual. "There's always a chance when you're in a junior position to a higher mortgage that you don't get paid," Savage said.
Before agreeing to a subordination, the city typically gets an appraisal to assure the new loan does not put the total of all loans on the property above 95 percent of the value of the property. In Roberts' case, the city didn't get a new appraisal.
"I'm assuming that somehow it was an oversight," Savage said.
On April 9, 1998, LaBrake sent Roberts' subordination request to City Attorney Jim Palermo for review. The agreement was approved and signed by Mayor Dick Greco on June 3, 1996.
But the $26,000 pool loan did not buy a $26,000 pool, said Charlie Merrell of First Choice Pools, Roberts' pool contractor.
Merrell said the 420-square-foot pool and concrete deck cost about $16,000. Merrell said he "absolutely" remembered the details of the job because he was dating Roberts at the time.
"I did give her a little bit of a deal with upgraded plumbing," he said. "She had helped me get financing at the (USF) credit union for a couple other customers."
Today, the property appraiser puts the market value of Roberts' home at $78,987. Of that amount, just $5,927 represents the value of the pool.
McCarter's load of debt
The first loan McCarter got at the USF Federal Credit Union, a $77,000 mortgage, was in January 1999 when she and her then-husband, Scott, refinanced their Riverview home.
Three months later, Lynne McCarter sued for divorce. Lynne McCarter got the Riverview home and assumed all the debt. But before the divorce was final, she co-signed for a $114,000 mortgage Scott McCarter got to buy a home for himself in Valrico.
Then, in November 2000, with LaBrake witnessing the mortgage, McCarter got a second loan on her Riverview home of $49,800.
So, when she got her $230,000 mortgage for her dream home on Corona a few weeks later, McCarter was paying two mortgages totaling $119,000 and was legally responsible for a third, her ex-husband's, of about $106,000.
Was McCarter's income sufficient to qualify for the loan to build the home on W Corona Street?
Besides her city income of $55,723 a year, and child support of $1,000 a month, McCarter had an $18,750 contract from the non-profit Tampa-Hillsborough Action Plan to hand out gift bags to first-time home buyers.
But a prequalification calculator on the USF Federal Credit Union's Web site suggests even that combined income of $86,473 was insufficient for the $230,000 loan McCarter got this year.
LaBrake told WFTS-TV Ch. 28 that McCarter's annual income totaled $104,000. Pressed for details last week, LaBrake declined to comment.
McCarter and Roberts declined to return several phone calls seeking comment for this report.
Scott McCarter said he had no idea how his ex-wife is making $104,000 a year. But if she is, McCarter added, he intends to ask a judge to reduce his child support payments.
Ness, the USF Federal Credit Union president, said he could not comment on McCarter's loan because of privacy laws. He said the credit union will "take on more risk if the value is there" in the home being built.
LaBrake says that he is doing much of the finish work on the W Corona Street house and that he and McCarter are borrowing $80,000 on credit cards to complete construction.
When it is time to move in, property experts say, the 4,200-square-foot home with pool and spa might be worth nearly $500,000.
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