NCUA Roots for a Comeback in Florida Real Estate

The National Credit Union Administration has entered the Fort Myers, Fla., real estate market in a major way as it struggles to sell hundreds of properties it ended up holding from three large credit union failures: Norlarco FCU, Huron River Area FCU and New Horizons Community FCU. The credit union regulator became the biggest landlord in the adjacent developments of Cape Coral and Lehigh Acres-located just east of Naples-after it took control of the three credit unions. The CUs were among a handful of lenders that helped finance a get-rich-quick scheme known as "Millionaire University" which promised unsophisticated investors a chance to earn a guaranteed 14% return by quickly flipping soon-to-be constructed homes. NCUA projects that it will suffer roughly $700 million in losses on the three CUs. Thanks to the failures, NCUA holds 754 properties, of which 281 are for sale or rent, 254 are still in foreclosure, 34 in litigation and 185 are rented, according to John McKechnie, chief spokesman for the agency. In addition, NCUA has made 158 loans to facilitate the sale of the properties. The agency has hired a professional property management firm to oversee its holdings.