No wonder the City of Miami's finances are in the crapper. The man in charge of its purse strings, Chief Financial Officer Larry Spring, lost his mother's house in a foreclosure sale last year. If he couldn't keep up with his mortgage payments, how can anyone expect Spring, who receives an annual $230,000 salary and benefits package, to balance the city's books? Already, Spring's revenue projections for the current fiscal year were so off the mark that the city could end up using $8 million in reserve funds to balance the budget, the Miami Herald reported earlier this month.
The CFO, who did not respond to a phone message and an email seeking comment, is also a key figure in a federal probe that the city misled bond investors by shifting restricted funds to plug big budget holes.
Maybe Spring was too distracted by his own financial troubles to get a good grasp on the city's money woes. According to copies of mortgage documents filed with the county clerk of courts, Spring purchased a four-bedroom house at 14421 Polk St. from his mother in 2004 for $150,000. Two years later, Spring refinanced the property for $191,250, securing $41,000 in equity. But by 2008, Spring stopped making mortgage payments because note holder Deutsche Bank filed for foreclosure. He apparently renegotiated the loan, because on September 16, 2008, the lender dropped the foreclosure claim. Yet four months later, the bank again moved to repossess Spring's house. This time he didn't fight it.
Deutsche Bank won a final judgment of $223,000 against Spring on December 24, 2009. Eleven months later, the bank sold the house for $65,000, less than half of what Spring owed. According to the Straw Buyer, an anonymous blogger who writes about mortgage fraud and was the first to report Spring's foreclosure, claims the CFO "appears to have stripped the home of all its equity then let it fall into foreclosure." The Straw Buyer informed Riptide that Spring also listed the 14421 Polk St. house as his home on the mortgage application, even though the CFO claims a condo unit at 1111 Brickell Bay Dr. is his primary address. "Did Mr. Spring ever live in the Polk Street house?" the Straw Buyer asks rhetorically. "If he did not, then that's mortgage fraud."