A contractor billed the Housing Agency's home-buyer education program for enrolling Margarette Jean, though she was ineligible. (Raul Rubiera/Miami Herald)
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HOME-BUYER PROGRAM

Housing Agency paid contractor bills without verification
A Miami-Dade County Housing Agency contractor was paid thousands to help people buy homes, but some say they never got the help.

A Miami Gardens real estate company collected $50,000 from the Miami-Dade Housing Agency to teach poor people how to buy homes, but some of those people say they had no idea that Classic Realty used their names to collect money or that the company had certified them as ready to buy, The Miami Herald found.

And many are still looking for the help they supposedly already received.

Classic's questionable bills -- which also include invoices for people ineligible for the program -- are the most glaring problems in the Housing Agency's Homebuyer Education and Counseling program.

Lourdes Perez, compliance manager for the program, acknowledged the billing problems with Classic but couldn't explain why the Housing Agency failed to catch them.

"I couldn't give you an answer to that," she said.

The Housing Agency began paying consultants in 2001 to offer eight-hour classes on home-buying after the agency had trouble finding qualified buyers for affordable housing. The familiesWould-be buyers were also supposed to receive one-on-one counseling to fix credit problems and help applying for loans.

The program, which has cost taxpayers $1.6 million so far, was set up with few requirements: The clients had to be legal residents, qualify as low-income, have saved at least $500 and couldn't already own homes. The contractors were paid $500 per client after submitting proof that each was ready to buy.

Most of the 12 contractors were nonprofit groups. Classic Realty was unique: It's as a for-profit company and the only contractor with its own mortgage brokerage.

In at least 47 cases, The Miami Herald found, Classic used its mortgage brokerage to provide the proof the company needed to get paid by the Housing Agency: mortgage prequalification letters issued in the names of its clients.

But 12 of those clients said they never knew they had been pre-qualified for a loan. The letters aren't signed by the clients.

"If we were prequalified, shouldn't we have been looking for a house? Shouldn't we be able to follow up and get a mortgage?" asked Marjorie Montina.

Montina said Classic Director Ann John-Latimer told her she had too much debt to get a loan. A few weeks later, Classic billed the Housing Agency $500, submitting a pre-qualification letter to prove Montina was ready to buy.

Records show Classic also broke another rule -- billing separately for Montina's husband. The program was restricted to one head of household.

In fact, Classic Realty double-billed for three couples, making $2,200.

Classic also billed for six people who already owned homes, including Margarette Jean, who purchased her house in 1998. Classic billed $100 for enrolling her in the program in 2005, though she says they told her at the time that she wasn't eligible because she owned her home.

Another Classic client, Yessy Felipe, wasn't eligible because her income was too high, yet the company billed $500 for her. She says Classic hadn't contacted her in a year.

The real victims may be people like Derrick Parker, a warehouse manager and single father of four who first went to Classic in 2002 looking for help to buy a home.

He said Classic employees told him he needed to save $5,000, but he had no idea how to save that on his $40,000-a-year salary. He gave up.

A year later, Classic told the Housing Agency Parker was ready to buy, again using a prequalification letter Parker said he knew nothing about.

His file also contains a certificate showing he attended a home-buyer education seminar, but he says he didn't.

"I can't lie for them," he said. "No class, no mortgage."

Another eight people say they had never seen the mortgage prequalification letters Classic used to bill the agency.

The Miami Herald reached four other people who say they never attended Classic's seminar, despite certificates signed by John-Latimer in their files. One woman, Sharon Grant, had moved to the Fort Myers area when Classic said she went to a class.

And dozens of Classic files are missing required documentation like proof of legal residency, signed applications or records of client savings.

In nearly every case, the Housing Agency paid the bills without question. In fact, the agency paid for 26 clients -- a total of $13,000 -- even though Classic noted in the invoices those people never attended the required class.

MDHA's Compliance manager Lourdes Perez, said she could not explain why invoices were paid when the requirements for the program weren't met.

Most of the questionable Classic invoices were submitted in May 2005, shortly before its contract ended. The company billed $28,800 in a matter of weeks after billing only $20,100 during the previous two years. John-Latimer signed all the invoices.

Perez said the sudden flurry of invoices didn't raise a red flag because the contractors often saved up invoices to submit them in large batches.

Although contractors often need months or even years to get clients ready to buy, the fact that Classic claimed to have processed 82 clients in just a few weeks also went unnoticed.

John-Latimer denies any wrongdoing.

"This counseling, it's a lot of work; $500 a client doesn't cover it," she said. "We do it really more for a social service because the client needs help."

She and her husband, Otto Latimer, acknowledged they should not have billed for people who already owned homes but they blamed MDHAthe agency for not providing an application that asked about that.

The couple said they will reimburse MDHAthe agency for the bills for spouses.

And the certificates showing clients attended eight-hour classes that the clients say they know nothing about? John-Latimer, who signed each of the certificates, said at least one was "preprinted'' and admitted it should not have been submitted.

Neither could explain why they issued prequalification letters to people who knew nothing about them, and in some cases had bought homes already without their help.

"Arguably, we could be accused of poor contract management. However, anything beyond that would be grossly inaccurate and untrue," John-Latimer said.