A lot of the units sold, mostly to friends and family to inflate the comps. Virtually all of these sales have resulted in short sales or foreclosure. But 92 developer owned units just sat there, and the developer stopped paying property taxes on them. Washoe County conducted a delinquent property tax sale in 2011, and the majority of the units were swept up by Secured Assets Belvedere Tower LLC (whose ownership is uncomfortably closely tied to the original owner). SABT was having trouble getting title insurance on the units due to taking possession through a tax sale, sued to quiet title, and were granted free and clear title.
The construction loan was never in first position – it usually never is. First position is the Feds. 2nd is the County for property taxes. 3rd is the City for Special Assessments if they exist. 4th is the HOA. And in 5th is the bank.
Fremont Bank either played it cheap or played it stupid or both. They could have paid off the delinquent property taxes plus 1% interest per month to cancel the Delinquent Property Tax Sales within 6 months. They didn’t.
Now Fremont has filed/refiled a NOD against Belvedere LLC on the $15.9M construction loan. But their position was wiped out when they failed to remain in “first” position by redeeming the Tax Deeds and bringing the property taxes current within the 6 month window specified under NRS. The foreclosure avenue is long closed to you, dudes. The horses are out of the barn, Elvis has left the building.
Next up – The $107 Bucket of Balls. The Somersett Golf and County Club “lease” deal may now have criminal overtones with the Attorney General involved.