Sure, the volatility on Wall Street isn't helping matters, but the real strain on local banks is the local housing collapse. Miami's OceanBank, Coral Gables-based BankUnited and Fort Lauderdale's BankAtlantic are all dealing with mortgages that, according to the Herald, are "way past due or in default." The deteriorating loan portfolios and dwindling loan loss reserves are prompting regulators to demand fresh injections of new capital; BankUnited recently raised $400 million and added $130 million to reserves for bad loans. Eventually the banks would love to get out of the real estate business which they have inherited through foreclosures, because the costs associated with insuring and maintaining those properties is 2-3x higher than what actual borrowers pay. Florida Attorney General: "This Is A Major Criminal Enterprise"
If you were making $30,000 a year and wanted to qualify for a million-dollar home loan in Florida, 2006 was a very good year. The Florida A.G.'s office just filed suit against 10 companies and 15 individuals in the Tampa Bay area for making $37 million in bad loans without verifying borrowers' incomes. The suit goes after one lawyer Allen Boyarsky and two real estate agents who allegedly conspired to "artificially inflate prices on home sales so Boyarsky and his co-defendants could get bigger loan amounts." The suit alleges one of the agents, Lori Polin, pocketed $165,250 in commissions while the other, Dawn St. Hillaire, walked away with $148,000. Their antics were mentioned earlier this year on another popular housing blog. Attorney General Bill McCollum put the lax lending environment in persepective, "Somebody that works at a car rental place was claiming they made $17,000 a month, but the bank never checked that out."Busted American Dreams in South Florida
In this report from the Jerusalem Post, real-estate broker Katerina Brosda one-ups McCollum in recounting the 2006 frenzy: "At one point I was walking around with 57 checks for $100,000 each in my pocketbook. Each one was a deposit for a new condo. I had a couple of associates who were sleeping out in a tent waiting to get into the sales office to buy a condo, and I personally saw people fighting over units, hitting each other over who was going to get the last unit." Reporter Jonathan Franklin's piece has several colorful anecdotes and interviews with some real South Florida characters including a Hollywood pawn shop manager inundated with Palm Pilots, Bose speakers, gold teeth and Guess watches. "It is better to lose your ring than your house," the manager says. 
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