The Los Angeles Times du lieu suivant : Los Angeles, California • 677

Cos Angeles Slimes SSunday, November 1, 1987 7 CONDOS: Owners Lose on Azusa Redevelopment Project I -Si cjz-Ja explaining that the Redevelopment Agency's credit standing would be damaged. Thorson said the full impact of the mortgage foreclosures will not be known until the city determines how much it can get when it resells the repossessed units, some of which are in poor shape, with carpeting ripped out and holes in the walls where plumbing was repaired. He said it will take a lawsuit to sort out financial responsibility. "I have no doubt there will be litigation," Thorson said. "I don't know what form it will take." Bitterness Over Loss Meanwhile, most of the buyers who walked away from their condominiums have moved elsewhere to start over, taking their loss with some bitterness.

Tait, who moved out of her condominium Oct. 8 to a new home in San Dimas, said: "I've never been an angry person my whole life long. But I'm vengeful. You wouldn't believe how vengeful I've become." She said she bought her condominium in Azusa with the intent of living there "until I went to Forest Lawn." Instead, she said, she lost her home and the money she put into it and has been forced to dig into the last of her savings to buy a new place. "I think it's horrendous to be put in this position," she said.

Greger said Tait and Crocchi suffered the greatest financial loss because they made large down payments. Some buyers recouped a substantial part of their investment by staying in their units free for more than a year while foreclosure proceedings were under way. 'Disillusioning Process' But for everyone, Greger said, "It has been a very disillusioning process the kind of thing that creates cynics." Greger said the condominium buyers put their faith in reputable financial institutions and the city, tried to work out compromises when things went wrong and were rebuffed at every turn. "I lost my home. I lost a place to live that I really cared about," Greger said.

"There is an emotional loss and a financial loss and a loss in belief in the system." LARRY GUS Los Angeles Times restaurant caught fish for their dinners before the restaurant burned down in the 1960s. Azusa condominiums surround man-made lake where patrons of the Rainbow Angling Club LAW DAY SEMINAR November 7th, 8:30 noon Are you thinking about a career in Law? Hare you wanted to know what attending Law School is like? Are you interested in attending a Law School that emphasizes passing the California Bar? Call now for information on LA SOUTHERN CALIFORNIA COLLEGE OF LAW 595 West Lambert Road Brca. California 92621 (714) 5291055 Continued from Page 1 bank's appraiser thought was worth $117,200 on the open market was assigned a value of $160,000 by adding $42,800 to represent the value of discount financing. According to this analysis, the buyer was justified in paying extra for a property that had discount financing, and higher loans also were justified. But the analysis failed to take into account the fact that market interest rates might fall, as they did, reducing the value of the special financing.

Saddled With Mortgages Greger said buyers thought they were paying a price based entirely on fair market value, but they were being saddled with mortgages that exceeded the property's worth. Efforts to obtain comment on the loans from Wells Fargo Bank, which absorbed Crocker Bank, were unsuccessful, but city officials confirmed Greger's description of the way the loans were made. Before the city sold bonds in 1979 to finance mortgage loans, it commissioned a study that found there was a market for the proposed housing. But the study was based on projected sales prices at the Rainbow Angling Club of $98,500 to $120,900. By the time the condominiums were built and ready for sale in 1982, they were being advertised at $162,000 to $270,000.

Rainbow Angling Club Corp. sold only 14 of the 56 condominiums in the project before entering bankruptcy. Soon thereafter, the City Council, which oversees the Redevelopment Agency, fired the consulting firm that had recommended the mortgage bond issue. Councilman Bruce Latta said the city should have foreseen the folly of the project. $200,000 Condo in Asuza In a written statement in February, 1983, he declared: "Anyone with any common sense would know that no one who could afford a $200,000 condo would want to buy one in Azusa.

They could buy one cheaper and in a nicer neighborhood at the beach." The Bank of America, which had loaned the Rainbow Angling Club Corp. more than $6 million for construction, foreclosed and acquired title to the 42 unsold units in March, 1983. A few months later, the bank sold the units to Pacific Union Properties, a San Francisco partnership, for $5,135,236, or about $122,000 each, and loaned the partnership nearly $400,000 to make needed improvements. The sale confirmed the fact that the 14 individual buyers, who had paid an average of $165,000 for their units, had paid too much. Pacific Union Properties converted the units that had not been sold into apartment rentals.

Tait said people who thought they had bought into a condominium community found themselves living in "a glorified motel." Units Unsaleable In addition, she said, the conversion made the remaining units unsaleable. As a rule, people will not buy condominiums in projects where their neighbors are renters, she said, and major financial institutions will not make mortgage loans on such property. In addition, the renters are living there for as little as $950 a month, while buyers had monthly payments of $1,500 or more. The bulk sale gave Pacific Union Properties control over expenditure of the dues collected from condominium owners for maintenance of the grounds and buildings. The condominium owners complained that most of their dues were being used to benefit Pacific may have been missed by its building inspectors.

Unsuccessful in court, homeowners turned to the City Council. "We went to the city several times and asked if there was a way we could reduce our mortgages, but they wouldn't work with us. They wouldn't even listen," Villaluz said. "We tried to approach them with the idea that if we all walk, you're going to be stuck with these places." Live With Consequences City Councilman James Cook said the condominium buyers made a bad investment and must live with the consequences. "They wanted us to bail them out because they paid too much," he said.

Nearly $2 million was loaned to the 13 Rainbow condominium buyers who stopped making their mortgage payments. Thorson said mortgage insurance normally would cover part of the loan loss, but in this case the insurance coverage lapsed. Thorson said Metmor, which should have paid the premiums to SECURE AFFORDABLE ALL NEW SENIOR APARTMENTS Hurry And Register Today! HILLSBOROUGH Union Properties, and many stopped paying the assessments of $167 a month. Meanwhile, owners, including Pacific Union Properties, began discovering construction flaws. According to two lawsuits, the plumbing system developed widespread leaks, the electrical system did not meet code requirements, and rain poured in through roofs and decks.

The suits have not been settled. Ted Villaluz, 42, who paid $155,500 for his condominium, said: "The structural defects were just horrible, milking me out to the point where I spent $1,500 on just leaks." Villaluz plans to move in December. Seeking Way Out The condominium owners hired an attorney, Richard E. Posell of Century City, to seek a way out of their plight. Posell sought relief from the City of Azusa; Wells Fargo Bank; Met-mor Financial which had replaced Crocker Bank as administrator of the mortgage loans, and Ticor Mortgage Insurance which had insured the mortgages.

Posell said no one was willing to help. "Everybody seemed to be saying it was somebody else's problem," Posell said. "It was a comedy of errors a classic bureaucratic snafu." The homeowners stopped making mortgage payments, hoping to focus attention on their problems, but succeeded only in inviting foreclosure. Injunction Denied In February, Posell filed suit on behalf of 13 of the owners against the city, Wells Fargo and Metmor in Los Angeles Superior Court alleging fraud and negligence and asking for a court order to block foreclosures. But Judge Ricardo A.

Torres denied a preliminary injunction in April, ruling that "the plaintiffs have caused the situation they complain about by failing to make their loan payments." Even though the judge refused to issue an injunction, the lawsuit is still on file. One part of the complaint charges that building code requirements were not met. But City Atty. Peter Thorson said state law grants the city absolute immunity for defects that Ticor, claims that it repeatedly asked Ticor how much to pay but never received an answer. Thorson said Ticor claims that it billed Crocker Bank and has no further obligation.

To complicate matters further, Ticor is operating under the conservatorship of the state Insurance Commission because of financial difficulties. So even if Ticor agreed that the insurance was in force, Thorson said, the Redevelopment Agency would not have its claims paid in full immediately. 'In Deep Trouble' Thorson said the mortgage revenue bond issue was designed to generate a fund for low- and moderate-income housing, but the defaults will deplete that fund and could jeopardize interest payments to bondholders. He noted that the three other housing projects financed by the 1979 mortgage revenue bond issue have been successful and said there is "a good possibility" that investors will be paid. "We are in real deep trouble if they don't get paid," he added, 2298 FooUmM Im DA TjAGK kdutrjp tESsT ROLL TOP DESK mSSSSAQh.

ttfvCM'' Buih-In Surpe Protector 'M JlfftSHilrJ aril HfTlii Rai-ed Panel Con.ruc.ion Mfg. Sugg. Retail CV.4 kl cVCtCtt S.r Fullv Finished Dove.ail Drawee $2322.00 -4 HUTr? II VflRW'? M1 aP DHii" Roller-Bearing Glides In 7 ''71FK WI $1599 L1m l'ElSW a PARRlCS 1 il" It, 4m( itr.m o.k I infer r'T' A A Private Gated Community GRAND OPENING! BRAND NEW-NOW RENTING 1 2 Bedroom Apartments Air Conditioning Pool Spa Recreation Bldg. Much More! EARLY RENTER'S BONUS 12TH MONTH FREE WITH 1 YEAR LEASE 450 N. SOLDANO AVE.

AZUSA io) oo4-333 OPEN 10am-6pm DAILY Section 8 Certificates accepted. 1 resident must be 55 years or older MON FEI 10 8 SAT 10 6 SUN 11 6 Remember Xmas 12 Weeks Away $1 INSTANT fZJz rx J-OUU CREDIT -TP-Vlsl 1 iSiW 17737 Gale, Qtf itwwa Asms mm! INAmVm RdL HI XTTViTtlN IH 606 W. Huntington Monrovia (818) 303-2471 i.Tur on 210 nv Verne Cmmr VMM fcai, Wr Trf ia Ifccv (La Verne Towne Center, (714) 593-3161 g4 Your weekends are precious, so use this invaluable source UskiiM ldeas on where ,0 9 and what ,0 d0- Thursdays, in the rlwUrS Times View section. New The Prfee Saver (818) 9124413 Prices Good Thru 11-8-87.