Bulletin E-Edition:
Bend subdivision faces foreclosure
Renaissance Ridge owner says he plans to refinance with local lender
By Andrew Moore / The Bulletin
Published: March 20. 2008 4:00AM PST
advertisement:
Renaissance Ridge, a partially-developed, 210-lot subdivision in southwest Bend might be headed for foreclosure, according to documents filed with the Deschutes County Clerk’s office, but developer Randy Sebastian said he’s working hard to prevent it.
The number of homes going into foreclosure continues to rise in Deschutes County, and Renaissance Ridge would be among the largest casualties to date of the local real estate downturn.
The default notices filed March 7 against Aspen Landing, LLC, a holding company for the subdivision’s developer, Renaissance Homes, say Cleveland-based KeyBank is owed approximately $13.1 million plus interest by Aspen Landing. The Renaissance Ridge subdivision property owned by Aspen Landing is to be put up for auction July 25 in lieu of payment.
Sebastian, the owner of Renaissance Homes, said he is committed to the development located off of Brookswood Boulevard and plans to refinance it with a local lender within 60 days. The Portland resident, who was in Bend on Wednesday for the opening of his company’s design center at 55 N.W. Wall St., said he is not walking way from the development; rather, KeyBank is getting out of the housing market.
“It’s not a Bend issue, not a Renaissance Homes issue; it’s a lender that wants out of the builder/developer market, and they don’t want to extend their loans,” said Sebastian. “I’ve got my life savings out there.”
In a statement sent to The Bulletin by KeyBank and attributed to Roberta Fuhr, a senior vice president and manager of the Homebuilder Group, the bank confirmed it has initiated foreclosure proceedings on Renaissance Ridge in accordance with Oregon law, adding: “This is an unfortunate situation for all involved. It is never a lender’s preference to foreclose in order to enforce its creditor rights.”
The statement also said that although KeyBank has discontinued lending to builders outside of the 13 states in which it has branches, it will continue to originate loans for home builders in Oregon and other states within its branch banking market.
Sixty-four homes in the subdivision have been built or are under construction. Deschutes County land records — in which the subdivision is legally recorded as Aspen Rim — show that 36 homes have been purchased.
Homes in the development currently range from $369,000 to $590,000. The rest of the development has been subdivided, paved with streets and strung with utilities, but the individual lots are unimproved.
The development has dangled some incentives for prospective home buyers in recent months, including offers to buy down interest rates on home buyers’ loans for up to $14,000, and in February 2007, offering a free Mercedes Smart Car.
It also shaved prices on its homes in February by 11 percent to 20 percent, according to The Bulletin’s archives.
Renaissance Ridge homeowner Bill Ormsby, a Southern California retiree who has lived in the development for a year, said he has wondered about the profusion of empty lots in the development but said he feels confident he and his wife won’t be leaving.
“We’re gonna stay put,” said Ormsby. “It shouldn’t affect us too much.”
Renaissance Homes is also developing a 60-home subdivision near Shevlin Park and a 30-unit townhome development in Bend’s NorthWest Crossing. Sebastian said he has sold units in each of his three Bend developments within the past week and that activity is “still strong.”
“There are some positive things happening,” Sebastian said. “We’re not leaving Bend.”
Not the first
Renaissance Ridge is not the first subdivision in Bend to receive a notice of default, a legal device used to notify potential creditors that an entity is behind in the payment of a loan.
In May 2007, Umpqua Bank filed a notice of default on a 38-acre plot of land approved for 265 homes in northeast Bend then owned by Proterra Development Ventures, according to The Bulletin’s archives. The bank sold the land in October 2007 for $10 million to the Edge Development Group, which is in the process of developing a subdivision on the property — titled Mirada — with homes ranging from $189,900 to $249,000.
A notice of default is not a guarantee of foreclosure, said Tom Greene, the president of the Central Oregon Association of Realtors. Greene said the vast majority of defaults are remedied before foreclosure proceedings — usually held six months after a notice of default — ever begin.
“Under Oregon law, the occupant of a home has up until five days before (a property) goes to court to make a deal with the bank, to sell to someone else or buy it (outright),” Greene said.
Greene added that should Renaissance Ridge go to foreclosure, homeowners in the subdivision would be legally unaffected.
Softening market
Home sales in the region slowed down during the past couple months, compared with last year.
Combined single-family home sales in Bend, Redmond and Sisters dropped from 470 in the first two months of 2007 to 263 in the first two months of 2008, according to data provided by the Central Oregon Association of Realtors, and housing supplies in those three cities remain at 11, 12 and seven months, respectively, according to the association.
In addition, through March 17, Deschutes County has recorded 265 notices of default, according to county records, which is an increase from the 75 notices recorded in the same period last year. For all of 2007, the county recorded 591 properties that had entered the earliest stages of foreclosure.
Market fears
Elsewhere in Bend, Buena Vista Custom Homes has rented 18 of the 29 homes in its Forum Meadows development near St. Charles Bend since efforts to sell the homes in mid-December at auction failed to produce a single sale, said Mike Higgins, a spokesman for the Lake Oswego-based builder.
“It was done in a loss position, but it was better than the alternative,” Higgins said. “If we can’t sell them, we’ve got to do something. We looked to auction the homes, but it didn’t work. Builders right now are just trying to make the mess go away.”
Homebuyers and builders have moved from overconfidence to fear of a sluggish market that won’t recover, said Peter Storton, the owner and broker of RE/MAX Town & Country Realty in Sisters.
“The next 12 to 18 months will be a reverse of what we have seen,” Storton said. “We have to hang on to the customers that we have and convince people that it’s a good time to buy.”
Greene wondered if all the recent housing turmoil is ultimately a good thing for homebuyers. He said he hates to see people get into financial trouble, but “land prices in Deschutes County got so high, and this is one of those steps in this correction,” said Greene. “It’s like the stock market; that’s basically what’s happening here.”
Jeff McDonald contributed to this report.
Andrew Moore can be reached at 617-7820 or amoore@bendbulletin.com.
ARTICLE ACCESS: This article is among those available to all readers. Many more articles are available only to E-Edition members. Sign up today!
blog comments powered by Disqus
