Jackson Hole Foreclosures spike in value
2009-11-04
The volume and value of properties in the foreclosure pipeline has
increased in recent weeks as the summer selling season ended and owners
are being forced to put their homes and land up for auction.
As
of noon Tuesday, the Teton County Sheriff’s Office reported 25
properties headed for sale on the county courthouse steps. Four
individuals or partnerships are responsible for 16 of those condos,
homes and vacant parcels or lots. Collectively, those properties have
starting bids totaling $42.3 million, which includes about $22 million
for six parcels south of town that are being auctioned as one.
While
Cheryl Chidester, who oversees foreclosure sales for the sheriff’s
office, said she doesn’t know why there was a sudden spike in
foreclosures, others have some theories.
“My feeling is that
borrowers are making every effort to get through the selling season and
sell their property,” said Bank of Jackson Hole CEO Scott Yandell. “But
as they get through the end of summer, through October, and their
properties don’t sell, they’re looking at a long, cold winter with not
many prospects.”
At First American Title Co., Laura Ginty,
assistant office manager, said she assumes these people have finally
run out of money.
But some have another theory: Property owners are intentionally allowing banks to pursue foreclosures so they can refinance.
“That’s
the only way to get their attention,” said 64-year-old Douglass
Jennings Jr., a San Diego, Calif., tax attorney. “They won’t negotiate
in good faith when you’re performing.”
He owns 12 properties in the state, nine of which are in Teton County.
Jennings
said he stopped making payments on his four properties that are
scheduled for sale Nov. 19. Outstanding debts total about $6.7 million
on three Grand View Condominiums on Snow King Loop and a cabin on
Craighead Lane, off Antelope Flats Road north of town.
Loans through Wells Fargo Bank and Countrywide, now owned by Bank of America, have interest rates of 6 percent to 7.5 percent.
“I
kept the loans current until three or four months ago,” he said. “I
tried to work with the lenders to modify the loans, and the banks have
been unwilling to.”
Banks have refused to refinance on investment properties or second homes. So Jennings defaulted.
It’s
a tactic Jennings used before in Cody, where he owns three properties.
The bank would not renegotiate the loans until the properties went into
foreclosure.
Finally he refinanced, and Jennings said he is again making payments on time.
“It would be imprudent of me not to talk to the banks and have the loan put in to market conditions,” Jennings said.
There is some indication that other property owners may not be using foreclosure as a tactical move.
Chidester
said she has been told that the owners of the six parcels south of town
– in Horse Creek and on Henry’s Road – took out a loan against the
properties to buy equipment for their business and defaulted on that
loan.
Owners are listed as Sheldon Player, Dale Player, Donna
Malone and Dana Malone. They currently owe the largest sum of about $22
million. The auction is scheduled for Nov. 19.
They could not be reached for comment.
These
six parcels are the largest foreclosure the county has seen since the
3.26-acre H-1 lot in Teton Village was sent to foreclosure by Wells
Fargo Bank.
The owner of that lot, Tatanka Hotel Development
Partners, owed $13.5 million on the first mortgage to the bank and
another $6 million on a second mortgage with Jackson Hole Mountain
Resort.
That property was pulled out of foreclosure after
Tatanka filed a Chapter 11 petition Sept. 30 in the U.S. Bankruptcy
Court for the District of Wyoming.
But Tatanka’s partners –
James Reinert and Antonio Ortega – may not be out of trouble yet. On
Nov. 19, three Granite Ridge properties with amounts owed totaling
about $6.2 million are headed to auction. Two of the properties are
listed as owned by Tatanka and a third belongs to Ortega.
They’re not the only ones with more than one property headed for sale.
The
Kip Konigsberg family also has three parcels along Fish Creek that are
scheduled for auction Nov. 12. With a starting bid of about
$3.1 million, the vacant parcels are 23.3 acres, 2.25 acres and 2.24 acres.
A fourth parcel with a home on it has not been advertised for foreclosure.
Jessica Rutzick, an attorney for Konigsberg in the past, did not return a phone call Tuesday.
The
Konigsberg properties have been troubled since the family bought a
32-acre parcel and subdivided it in 2006 using the family exemption
law, which allows subdivisions of land outside most county regulations
if the property transfers are between family members. The intent of the
statute was to make it easier for ranch families to break out parcels
for their children. In Teton County, officials fear land speculators
will abuse the exemption.
In January, the county denied
Konigsberg a boundary adjustment for some of these parcels, saying that
the New York lawyer violated state law and county land-development
regulations when he used the exemption to divide the 32-acre parcel.
The remaining properties advertised are all valued at less than
$1 million each and are scattered across the valley.
Yandell, of Bank of Jackson Hole, said the only reason a bank files a foreclosure is if a borrower is unable to pay.
“A
bank can have a problem loan and work through restructuring it as long
as the borrower has the ability to keep paying,” Yandell said.
“Normally, a bank won’t file foreclosure until, clearly, a borrower
can’t pay anymore.”
Options other than foreclosure include
lowering mortgage payments, refinancing, short sales or deed-in-lieu of
foreclosure, he said.
Yandell would not say how many troubled loans his bank is now working through, only that it has “a handful.”
Although November does have more troubled properties in foreclosure, the problem is not too widespread, he said.
“There are 12,000 deed properties in Teton County,” he said. “[Twenty-five] is not a very big percent.”
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