Pain persists in wake of property froth
In 2007, Credit Suisse Group sold $163.5 million in mortgage-backed securities backed by a virtually empty former Superfund site in North Miami, Fla. Investors didn't even blink at the $475 million appraisal of the property's value. Now, city officials are moving to seize control of the 188-acre development site. The commercial mortgage-backed securities sold to investors are on track to become the second-biggest flop ever among such securities. Holders of the bonds likely will see little or no principal returned from the deal. Negotiations are ongoing, with the servicer overseeing the loan hoping to sell it to the city for $6.5 million. A lawyer for the servicer, Trimont Real Estate Advisors, said his client still could retrieve value, but declined to say how much.