Article Courtesy of The Tampa Bay Times

By Susan Taylor Martin and Jeff Harrington

Published October 19, 2016

GIBSONTON — During the boom years of the early 2000s, the dream of home ownership lured hundreds of buyers to a new community called Kings Lake.

For less than $135,000, they could get a two-story house with four bedrooms and two-and-a-half baths. They could get mortgages with little or nothing down. No worry -- prices were quickly heading up, doubling in a couple of years.

   
Prices are rising again, though they aren't back to pre-2006 levels. Most of the houses are occupied, although dozens are now owned by giant investment firms and filled by renters. Crime is down, but security patrols still cruise the streets to keep away burglars and drug dealers.

And even as Kings Lake is still recovering, hundreds of new houses are going up in south Hillsborough County, some directly across Big Bend Road in the fastest growing new-home community in all of Tampa Bay. Some of the houses are being bought with little money down — one of the factors that contributed to the last housing crash.

Just 128 of the original Kings Lake homeowners are still there. Cassandra Bryant is one of the survivors. The houses on either side of her and the three directly across the street all went through foreclosure. Bryant doesn't know the new residents; she thinks many are renters.

"I've been here almost 13 years,'' she says, "and I can't tell you who my neighbors are."

•••

Once an area of citrus groves and vegetable farms, south Hillsborough County has the kind of vast, cheap acreage beloved by developers. It was the logical place to put in new subdivisions aimed at a rising middle class priced out of other areas.

But Kings Lake had growing pains at the outset.

Babcock Investment, a family-owned real estate firm that amassed the undeveloped tract in 1995, had trouble marketing it to developers. Babcock executives told Hillsborough County commissioners they had "minimal success" pitching it as a single-family homesite for years.

One builder, American Heritage Homes, contracted for some lots in 1999 but backed out. Only after commissioners eliminated certain construction fees for developers in March of 2000 did Lennar Homes and Maronda Homes sign deals to buy lots and build on them.

After that, Kings Lake took off.

Both builders drew praise for their models, sweeping the annual Parade of Homes awards in 2002 in the category of houses in the $100,000 to $125,0000 range. New buyers included sheriff's deputies and Walmart clerks, auto mechanics and teachers. A dozen worked for the military. About 10 were truck drivers.

But there were hints of trouble. Many were able to finance 100 percent of the purchase price, giving them little or no equity. Lending standards were often lax. A member of the Air Force qualified for a loan though he had declared bankruptcy just two years before. A couple got a loan even though the wife was just three years out of bankruptcy.

Universal American Mortgage, which handled a majority of financing for Maronda and Lennar, boasted that it was providing loans for many buyers who might not have qualified under traditional terms.

About 70 percent of the first 60 Kings Lake buyers made less than the median family income of $50,500 at the time, a Universal loan manager told county commissioners, and 35 percent received down payment assistance.

Many came for one reason: Kings Lake had the cheapest nice homes around.

The Kings Lake subdivision in southern Hillsborough County was attractive to home buyers because houses were new, large and relatively inexpensive. But many started getting in over their heads.

Patricia Greene, a certified nursing assistant, was working in Hillsborough but living in Sarasota. Prices there were too high, so she jumped at the chance to build a new house closer to her job for just $134,000.

"The interest rate probably could have been lower,'' says Greene, a single parent with a baby then 18 months old. "I was probably too excited to get a house."

In early 2004, Greene and her son moved into their four-bedroom home. Prices in Kings Lake were already rising, and the next year she refinanced for $163,800. In 2006, she refinanced again for $224,400.

"It was too easy to get money,'' she says. "Every day, they were throwing offers (to refinance) at you — you can get money to do this, you can get money to do that.''

At the peak, in 2005-2006, property values in Kings Lake could still justify such large refinancings. Several houses had resold for double their original cost; prices soared as high as $325,000.

In late 2005, firefighter Jacob Lilly paid $228,000 for a house that had sold a few years earlier for $115,000. He financed 100 percent of the purchase with two loans, the larger one an adjustable rate mortgage.

"I did have some concern what would end up happening after it started to adjust,'' he says, "but kind of like everybody else I assumed the market was going to keep going up and up and up and I could keep refinancing to a better rate.''

In early 2007, though, Lilly noticed the economy was slowing down. Houses were selling for drastically reduced prices or weren't selling at all. He had a side business installing pool enclosures but he wasn't getting any calls.

"Most peoples' disposable income was nonexistent, or a lot lower than it had been before,'' he says. "That kind of nonessential home improvement work is something people don't do.''

With his income sharply reduced, Lilly went into foreclosure in 2008. So did Greene, whose second refinancing had swollen her monthly mortgage payment to around $2,000 at a time when her salary had been cut.

"Refinancing, that's what killed me,'' she says. "I missed one payment and that was the end of it. I could not catch up.''

By 2009, Kings Lake was in the full throes of the foreclosure crisis.

This graphic shows all the homes in the Kings Lake community in southern Hillsborough County. Homes marked in red have gone through foreclosure since the housing crisis.

"Everybody was buying and getting those loans and then the bottom dropped out,'' says Stephanie Delapaz.

Delapaz was among the homeowners remaining as the exodus swelled. Then a reservist on duty at MacDill Air Force Base, she had chosen Kings Lake because it was close to Interstate 75 but far from what she called the "rat race'' of the city. She and her husband built a house on the lake, added a pool and continued to enjoy life in the community along with close neighbors who also were able to keep their homes.

But everyone felt the effects of foreclosure.

Because so many people defaulted on their dues, the Kings Lake Neighborhood Association couldn't afford to keep paying for all residents' cable TV. Once neat lawns were taken over by weeds.

"At a lot of the foreclosures, the grass was growing really tall,'' Delapaz says. "They gated the playground and you had to have a passkey to get in because they were having trouble with teenagers. They had a lot of issues during that time with break-ins.''

There were far more serious crimes, too.

Like many in Kings Lake, Egan and Nicole Atkins had overpaid for their house in 2006, plunking down $275,000, or double what the original homeowners paid just four years earlier. Like many, they received nearly 100 percent financing.

But within two years, the couple had filed for bankruptcy. They held on to the house, battling foreclosure for years — even after they divorced.

Early one morning in July 2011, Egan Atkins returned to the house where Nicole still lived and stabbed her to death as she slept in a room with her boyfriend.

•••

As houses like the Atkins' were auctioned off at foreclosure sales, investors swooped in. A Mississippi couple bought 11 houses. Blackstone, the huge private equity firm that snapped up thousands of foreclosures nationwide, bought 32 houses through its Invitation Homes subsidiary.

Blackstone and another big company, American Homes 4 Rent, now own and rent out nearly 10 percent of the houses in Kings Lake.

One consequence of all those rentals: Many residents say they know few, if any, of their neighbors.

Stephanie Rohde, 43, who moved from Niagara Falls, N.Y., last April and is renting a house with her husband, Brian, says she has "not a clue" about those living around her.

"I know that sounds bad," she says, "but it's hard to get a relationship going when a year from now who knows where people will be."

Several of the rentals belong to the Kings Lake Neighborhood Association, which took title to the houses after the owners defaulted on their dues. The income helps offset the association's continuing deficit, but president Josh Folckemer would like to see an end to investor-owned houses and a return to owner-occupied ones.

Lance Rothstein | Special to the Times

Kings Lake Neighborhood Association President Josh Folckemer and his son