RE Loans #A0109

We dug this information up today and thought we would give those in the know a chance to chime in.  The Loan Summary sheet dated November 5, 2009 lists the following information on page two:

A0109
This property is located in Salt Lake County, Utah. It consists of 496 acres of which 260 are entitled for
187 residential lots, 60 condos and a commercial component. Original appraisal $23,000,000, current
$12,000,000. Loan $5,616,478. Foreclosure process has begun.

The current holder of the foreclosed upon loan is not identified by the REL folks.

According to the  this October 2009 posting, however, “the current beneficiary of the Trust Deed as of the date of this notice is: Barney J. Ng., An Individual.”

Is this a head scratcher that we don’t understand or is it yet another example of Barney’s ability to use our cash for his benefit?

Perhaps Jim Weissenborn will explain this to us in his upcoming newsletter.  In the meantime, can anyone take a stab at explaining this?

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14 thoughts on “RE Loans #A0109

  1. According the the December 31, 2009 Valuation Report
    prepared by Mary Ann Lerch the loan is only worth %42
    of its face value. Her report states;

    “Property is land in Salt Lake County, Utah consisting of 496 acres of which 260 acres are entitled for
    187 residential lots, 60 condos and a commercial component. The status is that the property is
    proceeding to foreclosure due to borrower insolvency. Foreclosure is delayed as a result of the title
    company clearing title. The original loan commitment was $5,616,478 which was 24.42% of the
    value of the then value of the property which was appraised for $23 million. The Maturity date is
    12/21/2009. The loan value is still $5,616,478 which is 46.8% of the current appraised value of the
    property which is $12 million.
    Valuation
    The loan is rated by the appraiser as a below
    CCC loan, and the rate of return on this loan is
    42%. The property is in foreclosure and the
    loan is non performing. In my opinion, the
    payments stream should be discounted by 42%. The value of the bond is the value of the principal
    due at the end of 24 months. Nothing commercial is selling right now, and the market is slow to
    move, with financing difficult to obtain. Therefore the payment stream and the computation of the
    present value indicate a value of $2,921,000, which is $52 on a $100 bond. Since the company is now
    a REO, the note will eventually be satisfied.”
    In another part of the report it indicates the borrower is Arlin Geophysical. They are a Salt Lake
    land development company, not accredited by the BBB. That should have been a warning sign. The declared
    bankruptcy, see http://www.freecourtdockets.com/docketsummaries/Arlin-Geophysical-Company-Inc-2-09-bk-33691-Utah-Bankruptcy-Court-Docket-Case-Summary-19279.htm
    It may not be worth the 8 cents a page PACER look but
    I will check it out to see if any of our villans show up anywhere. How did we get hooked up with this batch of bad actors?

  2. Found the note between Arlin Geotechnical aka John E
    Worthem. Loan was 11,250,000. Care to guess what the Ng’s got as points? 6%. $675,000, Nice!

    After spending $45,965 in attorney’s fee’s between the federal civil suit and the bankruptcy of Arlin and Wortham. We now own a whole lot of land in the Utah desert that has no infrastructure.But don’t
    Mary Ann Lerch was told the outstanding balance on
    the loan was $5,616,474 when in sworn declarations
    filed by RE Loans lawyer in the BK court says the outstanding balance was $8,417,384 without penalties and interest. Gee, do you think that Mary Ann’s apprisal of $12,000,000 will hold up? Is it on the market yet? Whats the asking price, Jimmy?

    If someone want to research this I will post the meets and bounds description in the new post.

    • I have to come to Ms. Lerch’s defense. The information she worked with was all provided to her by RE Loans LLC. She did not make any independent appraisals of any of the real estate. The initial property appraisal and the revised property appraisal were all generated by RE Loans LLC -(undoubtedly Barney or Kelly) not by Ms. Lerch. Her calcuations related to the present value of the promissory note which she didn’t understand no longer existed if the property was REO.

  3. Construction Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing
    recorded in the official records of Salt Lake County, Utah, as Entry No. 9587760, Book 9232,
    Pgs. 7368-7409

    • Well that’s interesting information which I tried but failed to locate. However, you don’t state who is shown as the beneficiary of that DT or the amount of the promissory note it secures. Do you have that info. My guess is that the DT Barney holds individually is NOT the Construction Deed of Trust you’ve referred to but a separate one that he took for his “fee” as he apparently did at Tumwater. I tried searching the Utah Recorder’s office records, but they were such a maze I gave up. If you’ve got a hint on how to do that, will you please share. Equitatus.

  4. Ok, now on to some serious stuff.

    Q: Whats RE Loans biggest investment?

    A:C0390 Canyon Club 61,146,348 9% of RE Loans

    What does valuation expert Mary Ann say about it,
    “We are estimating that the loan will be paid in full seven years after the due date which is 1/7/2016, with several interim payments along the way beginning in 2011. As shown in the table, the estimated fair market value of the note is $16,821,364 or$16,800,000 roundedwhich is $28 per $100 of face value.”

    Q: How did we end up in this mess?

    A: Barney Ng know how to pick em’

    See: http://www.jhnewsandguide.com/article.php?art_id=3667

    and

    http://www.jhunderground.com/2009/12/23/edgcomb-seeks-access-for-another-development-on-snake/

    Jimmy why is this in basket 2?

    I think you need a basket 4 for investments that
    wiii be paid after all noteholders are dead and burried.

  5. These guys fall into the same “bucket” as the All-American Bottled Water guy, the Arlin Geophysical guy and Michael Ohayon and David Papera. Barney really does know how to pick ’em. It seems as if he found the people who nobody else would ever consider making loans of any amount to and gave them millions, often times without even a mere kicking of the tires, so to speak.

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