The bank foreclosure list of Brooklyn, New York-based Sovereign Bank contains lots of multifamily properties in South Florida, based on foreclosure filings in the county courts of Broward, Palm Beach and Miami-Dade.
Among these foreclosed properties are four apartment buildings in Broward, namely Royal Sheridan, Palm East Apartments, Normandy Apartments and Heritage Green Apartments. All these apartment complexes were formerly owned and managed by the family of Constantin Ardelean, based on court records.
Of the four foreclosure judgments, the highest was the $6.9 million assessed against the Royal Sheridan, followed by the $5.6 million assessed against the Heritage Greens. Both the Normandy Apartments and the Palm East Apartments were each assessed for $1.7 million.
Sovereign Bank continues to struggle from its bad loans despite help from Spanish bank Banco Santander which acquired it early this year. According to Banco Santander, Sovereign’s nonperforming loans have been rising, accounting for nearly 4 percent of all its loans in the April-June quarter and marking a jump from 3 percent during the first 3 months of the year. For the first 6 months of this year, the bank allocated $742 million for mortgages expected to default and go into its bank foreclosure list.
Another bank hit by multifamily foreclosures in South Florida is Wachovia Bank, the mortgage lender acquired by Wells Fargo in December last year. Wachovia foreclosed on three residential projects called Homestar in the southern part of Miami-Dade, with one at Sunset Cove, the other at Miller Cove and the third at South Dade for failing to pay a total debt of $4.7 million. The original mortgage was last modified in 2006 at $12.8 million.
The Sunset Cove building has 22 units, with seven homes sold by developer Jose Hernandez and his firm. The remaining 15 units and two unsold units at Miller Cove were the ones foreclosed. Construction on the South Dade project was never started.
Wachovia Bank also filed foreclosure actions against Philadelphia-based developer Palm Club Apartments LLC, which acquired the 160-unit Palm Club apartment complex near the Palm Beach Community College campus in Lake Worth in 2004.
The developer also purchased an adjacent lot from the community college and borrowed $8.7 million from Wachovia. The next year, it increased its loan by borrowing another $3.5 million from the bank using the properties as collateral. The properties are expected to go into Wachovia’s bank foreclosure list if the developer fails to come up quickly with the millions to rescue the properties.