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Archive for Thursday, August 18, 2011

Bella Sera residents hope to expand community after sale

August 18, 2011

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The granite is polished, the pool is filled, the outdoor kitchen is stocked, and the lobby still “looks like a four-star hotel.”

Now, all that is missing are people to live here.

The handful of residents at the Bella Sera at the Preserve complex are hoping that soon will start changing as an area bank works to take over the multimillion dollar condominium development along Bob Billings Parkway near Wakarusa Drive.

M&I Marshall & Ilsley Bank is in the process of foreclosing on the property after the development group that built the project back in 2006 has fallen behind on its payments. The sheriff’s sale for the property will be at 10 a.m. today at the Judicial and Law Enforcement Center, 111 E. 11th St.

“The neighbors who are here are anxious to get more neighbors,” said Tammy Steeples, who lives at the development.

Steeples estimates that only 13 of the approximately 50 condominium units are occupied. According to court documents, the development has struggled financially. The project received a $16.28 million loan in 2006, but the loan went into default as the development group fell behind on the payments. About $13.45 million remains unpaid on the loan, according to court records.

She said the development is extremely nice. It includes a swimming pool, a huge patio, an outdoor kitchen, a media room for up to 20 people, a bar area and a lobby that “looks like a four-star hotel.”

But she said the development group — which was lead by Lawrence businessman Jes Santaularia — got the project started at the wrong time. The real estate bubble burst, and home and condo sales dried up.

Steeples said since word of the foreclosure began to circulate a few weeks ago, several community members have been asking whether there would be a buying opportunity at the development.

“We’re hoping that this will really allow them to start selling again,” Steeples said. “Maybe there will be some bargains out here for awhile.”

The sale includes about 38 unfinished condo units, plus a vacant lot that is adjacent to the property. It wasn’t immediately clear whether today’s auction would sell the condo units individually or whether all the property would be sold in bulk. A spokeswoman with the Sheriff’s Department did not know, and the attorney handling the foreclosure for the bank was unavailable for comment. But the legal filings suggested the property would be sold in bulk.

That makes it unlikely that many individuals will be bidders. The minimum bid for the property will be the $13.45 million owed on the loan, and the state’s foreclosure laws require the winning bidder to submit a cashier’s check for the full amount shortly after the auction has concluded.

Comments

Sigmund 2 years, 8 months ago

lunacydetector (anonymous) replies… "...of course with a commercial loan, the bank can pretty much take anything back for all sorts of reasons."

Line of credit loans or secured by inventory maybe, but on a loan secured by reality, not without a default or other extraordinary circumstance like the owner is stripping out assets (fixtures, marble, wire) that impairs the banks collateral.

lunacydetector (anonymous) replies… "don't banks have insurance to cover a portion of the mortgage so if there is a default and they play the paper formality to get it back, up to half is recouped from the insurance company, or am i mistaken?"

There is no Fannie or Freddie like insurance for commercial properties that I know of. Commercial lenders generally hold their loans in their portfolio and service the loan personally. Of course if the bank makes too many bad loans and their reserves don't meet minimum standards, the FDIC can seize the bank, sell it to another bank, and guarantees up to $250,000 per depositor, per insured bank.

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Sigmund 2 years, 8 months ago

George_Braziller (anonymous) replies… "That's what I said. On paper I "legally" owned the property and was responsible for the debt, insurance and taxes, but realistically the mortgage company owned it until the debt was paid."

Actually what you said was "How can the bank "buy" something they already technically own." I mistakenly understood "technically" to mean "legally" or "in reality." The only way the registered owner doesn't technically own a property is if the bank doesn't "technically" hold a mortgage. I also mistakenly thought you wanted an answer to the question. My mistake.

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formerlyanonymous 2 years, 8 months ago

I don't think the condo project failed because the housing bubble burst. I think it failed because the asking price for a condo is as much as a nice 4-5 bedroom house in Lawrence. Those with the money to live some place like that are more likely to want their own home and to pay someone else to do the landscaping and other upkeep work.

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Sigmund 2 years, 8 months ago

George_Braziller (anonymous) replies… "I was owner of record but I didn't actually own it."

Beg to differ, but yes you did, you technically owned the property.

A mortgage occurs when an owner (usually of a fee simple interest in realty) pledges his interest (right to the property) as security or collateral for a loan. A mortgage is only security on the loan you used to buy the property. Technically you are the owner of the property and technically the bank held a mortgage securing your loan.

If the bank owned the property they could kick you out of the property anytime they wanted even if you were current, which they can't. If the bank owned the property they would have to pay the property taxes, which they don't.

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Sigmund 2 years, 8 months ago

alfie (anonymous) says… "he (cub reporter and PR hack, Chad Lawhorn). Hey Sigmund these were you words not mine. i think overall chad does a decent job reporting, not sure about this time though."

Yes I know, that is why I put my words, "cub reporter and PR hack, Chad Lawhorn" clarifying the subjective pronoun "he," in parenthesis to indicate that those were not your words.

Be sure to "Like" Chad Lawhorn on his Myface page.

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somedude20 2 years, 8 months ago

Looks like an old folks home, it really does. Heck, I thought it would be a place for the blind since it is so darn nasty lookin.

U-G-L-Y you don't need no alibi you ugly , you ugly!

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Sigmund 2 years, 8 months ago

George_Braziller (anonymous) says… "How can the bank "buy" something they already technically own."

Because technically they didn't own it. They held a interest in the property to secure the loan they made to the owners, who technically owned it. When the owners failed to make payments M&I brought a action to have the courts seize the property and sell the property to the highest bidder and send them the proceeds. They bid on the property and bought the property, (they will send a check to themselves) and now they technically own the property.

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alfie 2 years, 8 months ago

(cub reporter and PR hack, Chad Lawhorn). Hey Sigmund these were you words not mine. i think overall chad does a decent job reporting, not sure about this time though.

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George_Braziller 2 years, 8 months ago

"The project received a $16.28 million loan in 2006."

"About $13.45 million remains unpaid on the loan, according to court records."

That means $2.83 million had been paid on the mortgage.

"It sold to the bank, but not for the amount owed on the loan. It sold for $2.75 million."

How can the bank "buy" something they already technically own. The purchase price is slightly less than what had been paid on the mortgage. Did they "buy" it for what had been paid on the mortgage? Is the purchase price just a number that has to be legally recorded or did the bank have to write a cashier's check to itself?

In a nutshell the bank now has full legal ownership of the building. But, I'm both confused and curious as to how the transaction takes place.

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AppologiesMyLiege 2 years, 8 months ago

The city should buy it and make a Homeless Shelter/Library/SRS hub/Food pantry out of it. It could be paid for by the rich by increasing property taxes.

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Kontum1972 2 years, 8 months ago

hmmmm...make a nice frat house...or bordello of blood

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Sigmund 2 years, 8 months ago

alfie (anonymous) says… "That makes it unlikely that many individuals will be bidders. The minimum bid for the property will be the $13.45 million owed on the loan, and the state’s foreclosure laws require the winning bidder to submit a cashier’s check for the full amount shortly after the auction has concluded. Where did you (cub reporter and PR hack, Chad Lawhorn) get this information?"

Likely from the Sheriffs office spokeswoman (the one who also didn't know exactly what was included in the sale) or one of the bidders (trying to limit possible competition since the attorney handling the foreclosure for the bank didn't return his call).

It is also likely that M&I was the winning bidder as normally banks will bid the price at least close to amount they are owed. If M&I is the winning bidders they get a $10 million loss on the original loan to use to offset other income or gains, the property, and probably a deficiency judgment in the near future against the development group. Pretty sweet outcome and bet they are glad Chad Lawhorn was "mistaken" on the details.

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alfie 2 years, 8 months ago

"The minimum bid for the property will be the $13.45 million". Yet they paid 2.75 million, i would have paid more but was told the minimum bid will be 13.45 million. Explanation is in order

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alfie 2 years, 8 months ago

AS REPORTED; That makes it unlikely that many individuals will be bidders. The minimum bid for the property will be the $13.45 million owed on the loan, and the state’s foreclosure laws require the winning bidder to submit a cashier’s check for the full amount shortly after the auction has concluded. Where did you get this information?

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Chad Lawhorn 2 years, 8 months ago

UPDATE: I covered the auction this morning. It sold to the bank, but not for the amount owed on the loan. It sold for $2.75 million. Normally, the opening bid on a foreclosure is what's left unpaid on the mortgage. But in today's world, I guess that is not always the case. I talked with the attorney for the bank and she said operations at the condo complex would continue as normal. She said the bank would be looking to take offers on the property. There were many Lawrence developers in the crowd this morning, but none bid. The bank's bid was the only bid. It sounded like the bank may entertain offers from individuals who want to buy a single condo unit. Thanks, Chad

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bootlegger 2 years, 8 months ago

vote for ME!!! Change will come!!

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thuja 2 years, 8 months ago

Its fun to play rich guy with money you borrowed and create useless buildings, eh Jesss.

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