Monday, August 25, 2008

Buena Vista Faces Foreclosures

From the Oregonian:

Continuing the drumbeat of real estate woes in Portland, one of metro area's largest boomtime builders said Wednesday that Sterling Savings Bank has started foreclosure proceedings against about 15 of his properties.
Roger Pollock, owner of Lake Oswego-based Buena Vista Custom Homes, Inc., was one of the most active builders around the metro area during the housing boom. Overextended when the downturn hit, he surprised the rest of the real estate community last year when he took the unusual step of auctioning about 240 homes in an effort to eliminate bank debt.
Pollock ultimately staged two auctions, and sold 177 homes and 11 lots for about $75 million. Some of the remaining unsold homes were rented, some with lease-to-buy contracts.

Pollock said he has always owned a portfolio of rentals, and currently has about 70 homes, all of which are for sale. The rentals don't generate enough cash to cover the underlying debt payments. Like many builders, he has been seeking lower interest rates, interest-only payments and other concessions from lenders that would help tide him over through the downturn.
The debt, he said, includes about $5 million in loans from Sterling Savings Bank on 15 homes.
"We're negotiating with all our banks and every house is a case-by-case basis," said Pollock, who was in Mexico overseeing a project he has under way there. "This is just the direction that Sterling chose to go. It caught us by surprise."

Pollock said the properties in question are owned by an independent investment entity, Del Playa Investments LLC. Buena Vista, he said, is not going into bankruptcy, but won't be building any more homes.
If Sterling goes through with the foreclosure, it could be bad news for some of the properties' renters. KATU Channel 2 reported Tuesday that some of Pollock's renters in Happy Valley had already received initial notices of foreclosure on the properties, which could eventually result in evictions.