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is suing in federal court in The corporateentity LLC, which is developing The claims that even though payments were current, Milwaukee-based M&u sold The Banyans’ mortgage to Chicago-basefd II, a group that buys loans typically to foreclose and own property, according to the complaint filed May 7 in U.S. Districty Court, Middle District of Florida. Principalsw of Sand Propertiesallege M&Ij representatives made fraudulent statements or concealed the trutg in its negotiations prior to a May 2008 loan The developers are seekint a rescission of the contract and unspecifiedd monetary damages from the bank, three of its officers — Daniel Bruce Williams and Joe Gessner — and Lincolnshirr Associates.
In June 2008, one month after the five partners modifiedthe $7.9 millionb mortgage and provided personak guarantees, M&I sold the loan to Lincolnshire Associates for $3.1 milliomn — a $4.6 million discount. The five principals in Sand Propertiezs -- George Lutich, Anthony Amico Jr., Frankk Perez, Nicholas Delcorso and James Nicholsonm -- allege that Milwaukee-based MI) never intended to providw the last drawof $124,881. They contend the bank was planninvg its withdrawal from real estate lendingon Florida’s west coas even as it obtained personal guarantees from the the complaint states.
Lutich said he learnesd third-hand that M&I was shopping the a practice where investors buy loans either to make money as the principalo and interest are repaid or to own the underlying asse t securingthe loan. M&I allegedly lister Sand Properties’ loan, then current, as in “imminent foreclosure,” a claim that Sand Properties callws “patently false” in court The principals of SandPropertiesd didn’t realize their loan was beinhg shopped around until an acquaintance calledc to ask if the project was in trouble, recordss state.
Sand Properties called M&I and offered to buy the loan at thediscounted price, but the group was told it was “too late,” states the complaint. M&II then failed to return subsequent callw tothe group. The Tampa lawyer representing M&I Bank didn’t return call for comment to the Tampa BayBusinessd Journal, but he forwarded the request to the An M&I representative said in an e-mail the companyg doesn’t comment on pending litigation. M&oI executives have said they discovered majodr problems in its loan portfolio in western Florida portfolioo shortly after the April 2006 acquisition of Gold Banc which is based inKansas City, Kan.
, and include d offices in Florida. Since early 2008, M&I has engagecd in a strategy for reducingits bad-loan portfolio in Florida by selling nonperforminhg loans at a discount. M&I executives have said they have now accountex for nearly allthe bank’sw nonperforming loans on Florida’s west
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