Texas Real Estate Slump Gives Mexicans a Chance to Take It Back

June 25 (Bloomberg) -- More than a century and a half after Mexico lost Texas to the U.S., Virgilio Garza wants a piece of it back.

A ``Texas for Sale'' sign and cowgirls in boots and white hats greeted Garza at the Convex center in Monterrey, Mexico, earlier this month. A Monterrey developer and investor, Garza was in search of foreclosed U.S. property to buy.

``Texas is like our home,'' said Garza, 45, who joined hundreds of Mexicans poring over lists of Texas properties at the four-day event. Garza, who owns manufacturing sites and other land in Mexico, said he and five partners may invest as much as $8 million in Texas. ``We believe there can be some opportunities,'' he said.

A rising peso and an economy growing faster than the U.S. have given some Mexicans the buying power to take advantage of the housing slump in Texas, which became part of the U.S. under an 1848 treaty that ended a three-year war between the two countries.

The peso has gained 3.2 percent against the dollar since the beginning of the year. The economy, which rose 2.6 percent in the first quarter from a year ago, is expected to grow 2.6 percent this year, according to a central bank survey of 31 economists in May. The U.S. economy is forecast to grow 1.4 percent in 2008, according to a Bloomberg survey of 57 economists.

Marco Ramirez of McAllen, Texas, is among those trying to sell foreclosed Texas homes to Mexicans. Ramirez's company, called Now! Co., has bought 32 Texas properties and has options on 88 more. His best prospects are Mexican buyers, especially in Monterrey, 150 miles from the Texas border, he said.

`Great Time to Buy'

``Many of these people have children who are studying in the U.S.,'' Ramirez said. ``They've been renting or leasing and now it's a great time to buy.''

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U.S., States Probe Real-Estate Loan Broker

The Federal Bureau of Investigation and securities regulators in California and Pennsylvania are probing a Philadelphia-based loan broker over allegations that more than 100 prospective borrowers lost millions of dollars through a practice in which the firm collected upfront fees for real-estate development but didn't find any funding.

Authorities say they are trying to determine whether Remington Financial Group Inc. and a related firm, BlueStone Real Estate Capital, accepted fees without seriously trying to obtain financing for clients.

"We have been made aware of the allegations and we are looking into the matter," says Special Agent Jerri Williams in the FBI's Philadelphia division.

California's Department of Corporations is investigating Remington and BlueStone, and also is looking into LandBridge Equity LLC, a land-investment company based in Washington, D.C., according to a person familiar with the matter. Jack Kemp, the former U.S. Housing and Urban Development secretary and vice-presidential candidate, is a senior adviser and director of LandBridge.

Remington is named as a defendant in six civil lawsuits filed in California's Superior Court that allege the company conducted an "advance fee scheme" by collecting nonrefundable fees from would-be borrowers with "no intention of providing the financing." The company has denied the plaintiffs' allegations.

Former San Diego Acting Mayor Ed Struiksma says he paid Remington $25,000 in fees, and received no financing from the company for land he wanted to buy for a housing development. A Toronto developer, Greg Heller, says he paid Remington $20,000 and didn't secure financing for a hotel project in Egypt. Both men say the soured deals cost them much more in penalties and delays.

Andrew Bogdanoff, Remington's founder and chairman, says he isn't familiar with either deal, but that dissatisfied clients could seek arbitration under their agreements with the company.

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