Foreclosure Properties Auction for Condo-Office in Augusta
A foreclosure properties auction for a condo-office complex located in downtown Augusta, Georgia and seized by the Federal Deposit Insurance Corp. from Haven Trust Bank, which was closed in December last year, failed because the sole bid did not reach the minimum $1.5-million bid set by FDIC.
The condo-office is a historic department store building which was being converted by Atlanta-based developer Horizon Group Investments into a complex of commercial spaces and residential condo units through a commercial loan of $5.7 million from Duluth-based Haven Trust. But Horizon later defaulted on the loan.
The building was added to the FDIC inventory of seized properties after the Georgia Department of Banking and Finance closed Haven Trust last year and named FDIC as receiver. All the deposits of Haven Trust were assumed by Branch Banking Trust Company, which is based in Winston-Salem, North Carolina.
As of June 2009, the unaudited receivership balance sheet of Haven Trust Bank showed $89.6 million in total assets and $354.6 million in total liabilities. The net deficit was almost $265 million and the total of proven deposit claims was $506.4 million.
According to FDIC spokesperson David Barr, the $800,000 bid submitted by Martinez car rental business owner Gurjit Jalli was too low, and because FDIC decided to withdraw the property from the foreclosure properties auction, Jalli no longer had the chance to increase his bid.
Barr said that the building will now be added to the nonperforming list of properties in the Haven Trust books of FDIC and to the more than 7,000 other nonperforming properties under the supervision of FDIC.
He explained that under FDIC policy, the agency will package the nonperforming mortgages into a single limited liability corporation and will then sell a portion of interest in the LLC to investors, with the FDIC retaining part ownership so it still has the chance to recover part of its losses from covering failed bank deposits.
In the case of the former White building, the buyer will be responsible for making money from the building either by selling the unfinished structure or completing the project and selling the condo units and renting out the commercial spaces.
During the auction held by FDIC, some commercial tenants and buyers of the finished condo units were present. Because of the failure of the foreclosure properties auction, they are now worried and are now thinking of canceling their contracts and moving out.
