The Securities and Exchange Commission accuses Tampa home restoration executive Brian M. Marshall of helping create a “fantasyland of fraud” to inflate his company’s stock after Hurricane Katrina.

Marshall became president of Home Solutions of America Inc. in 2006 after it bought Tampa’s Fireline Restoration Inc., a company he founded. Home Solutions’ Frank Fradella and Jeff Mattich were also charged.

Regulators accuse the men of faking millions of dollars in revenue and writing false press releases to raise the price of their NASDAQ-traded stock. The stock price eventually collapsed when the shenanigans were disclosed, the SEC said.

The SEC singled out Marshall, saying he booked more than $9 million of make-believe construction contracts with other companies he controlled. Companies founded by Marshall, including Initech Restoration Inc., filed Chapter 11 bankruptcy November 20.

"The company's financial results were largely fabricated and its public statements were intended to deceive," said Rose Romero, Director of the SEC's Fort Worth Regional Office. "Simply put, instead of rebuilding New Orleans and other hurricane-stricken areas, they constructed a fantasyland of fraud."

Three years of depreciation has left close to half of all Tampa Bay homeowners owing more on their mortgages than their homes are worth.

In a September snapshot put out by First American CoreLogic, 46 percent of residential properties in the Tampa Bay area struggled with negative equity. That's 314,183 properties under water.

In Florida, about 2 million of 4.6 million residential mortgages are upside down, for a rate of 45 percent. The national rate is 23 percent.

Here's a state-by-state breakdown: View this photo.

First American admits that it exaggerated negative equity in the recent past, but claims to have corrected its methodology.

Under the old counting method - which assumed homeowners made fuller use of home equity lines of credit than they actually did - Tampa Bay's negative equity rate would have been 56 percent.

In its press release, First American said the new counting method is "more precise." The more accurate wording is "less flawed."

Nevertheless, a 46 percent negative equity rate is nothing to chuckle at.

"Negative equity continues to be pervasive and to impact almost every segment of the housing market," said Mark Fleming, chief economist with First American CoreLogic.

"The recent improvement in home prices this past spring and summer has slowed the increase in negative equity, but it will take a significant rebound in home prices, which we are not expecting, to offset the dampening effects of negative equity in the most depressed states."

Florida was third worst in the United States, but its upside down mortgages were nowhere as plentiful as those in Nevada.

For everyone who swears by the Case-Shiller home price index, there's another person who rightfully points out that its data is a bit sloth-like in arriving.

Case in point: Yesterday we published Tampa Bay home sales data from Realtors showing a solid October. But Case-Shiller is still churning out September numbers that we already know were lackluster.

Here they are anyway. Tampa Bay housing values dipped 0.6 percent from August to September. The average price change on the 20-city index was a rise of 0.3 percent. As you can see, we were a laggard.

From September 2008 to September 2009, homes depreciated 16.7 percent in Tampa Bay. What struck me was that Miami, which we've outperformed on price for more than a year, depreciated less than us over the year. It's probably a one-month blip.

For all of Case-Shiller's mathematical sophistication, the peak-to-trough home price change for Tampa, at minus 40 percent, almost matches Realtor numbers. So expect Case-Shiller's October report, which comes out before Christmas, to show a healthy housing market improvement.

But we already know that, don't we?  

From Bay News 9:

Starting Monday, potential house buyers in Pasco County will have a new way to search for foreclosed homes.

Officials launched an auction site that will allow people to make a bid on foreclosed homes throughout the county. Now, instead of getting in a car and driving to the on-site auctions, making a bid is as simple as turning on the computer.

Just be careful not to repeat the mistakes of these Sarasota bidders.

First American CoreLogic is upbeat about Tampa Bay home prices. The real estate company predicts Tampa Bay appreciation of 5.56 percent between September 2009 and September 2010.

Most of that price growth will occur in the spring and summer of 2010, the company said. Short term, depreciation is the name of the game:

The new First American CoreLogic HPI Forecast anticipates continued declines in most markets, albeit at a slowing rate, for the next six months, followed by a rebound in the spring. Above-average levels of foreclosures, inventories and unemployment will continue to take their toll in many major metropolitan markets in the short term. As the economy continues to improve and these factors improve, the forecast calls for housing prices to bottom for most markets by March 2010 and then turn positive. This would yield the first positive year-over-year house price appreciation since the beginning of 2007.

Here's a chart with a state-by-state breakdown of home price changes from 9/08 to 9/09 and the projected changes from 9/09 to 9/10. Note how Florida outperforms states like Arizona, Nevada, Georgia and North Carolina, but under-performs California.

Many economists, most recently at a home builders conference I reported on last month, have been predicting housing weakness next spring when several things happen at once: Interest rates rise, the home buyer tax credit expires, foreclosures tick up and the government eases purchases of mortgage backed securities.

Now here's more support for that theory from Reuters:

Both the credit and another major government action -- the purchase of more than $1.4 trillion in mortgage-related securities aimed at cutting home loan rates -- will now end within weeks of each other. The purchases stop by March 31.

Unless the employment picture brightens around that time, housing does not have enough footing to forge a recovery on its own, most economists and industry experts said.

More proof that the government should be focusing on making it easier to operate small- to medium-sized businesses - whether we like it or not our primary job engine. Talk of large tax increases, crushing debt and new multi-trillion-dollar government entitlements encourages caution and businesses retrenchment.

In the last quarter, Tampa home prices rose 2.48 percent, making the city 100th best for home appreciation in the United States.

So says the Web site neighborhoodscout.com.

Changes that small over 3 months are pretty much meaningless, but I was struck by the fact that Florida cities like Bradenton, Sarasota, Fort Myers and Miami crowded the list of top appreciators. Here's what neighborhoodscout had to say:

This makes Tampa one of the highest appreciating communities in the nation for the latest quarter, and may signal the city's near-future real estate investment strength.

Relative to Florida, our data show that Tampa's latest annual appreciation rate is higher than 46% of the other cities and towns in Florida.

A reader called me excitedly about the "news" and I did him the courtesy of checking it out. I admit I'm a bit suspicious. The Web site babbles on about its proprietary home evaluation method developed by "Dr. Schiller," he of the mysteriously absent first name.

Could it be trying to conflate its Dr. Schiller with the Dr. Shiller of S&P Case-Shiller home price index fame? No, I'm sure it's just an oversight.

Remember way back in 2008 when the Bush administration approved the Real Estate Settlement Procedures Act? RESPA included new mortgage lending rules aimed at preventing lenders from charging confiscatory closing costs and slipping in unfavorable interest rate changes. Lending documents were supposed to clarify rather than cloud:

By improving the disclosures borrowers receive when applying for a mortgage, and by promoting comparison shopping, HUD believes its new RESPA regulation will save consumers an average of nearly $700 in mortgage costs.

The federal government gave mortgage lenders the whole of 2009 to get up to speed with the new disclosure policy. Most banks have already complied. Starting on Jan. 1, 2010, the Feds were set to go medieval on any scofflaws.

No longer.

In a press release this week, the Department of Housing and Urban Development (HUD) announced that regulators would "exercise restraint in enforcing new regulatory requirements." The grace period will last 4 months, through April 30.

I can understand the desire not to rock our rickety recessionary boat too much. But lenders have had a year - and in many cases 18 months - to make what amounts to piddling changes to their lending documents. Why is the government going soft?

The irony is that government has squeezed mortgage brokers - whom it blames for helping bring down the housing market - and puffed up the large banks. For all their flaws, mortgage brokers allowed home buyers to shop around for the best interest rates. In the Tampa Bay area, they're being pushed out of business by the banks.