Bank Foreclosed Homes in Las Vegas Grew as Corus Bank Closed
The number of bank foreclosed homes in Las Vegas increased after the U.S. Office of the Comptroller of the Currency closed Corus Bank, which had provided volumes of loans to foreclosed condo developments in the city.
In a recent regulatory filing by Chicago-based Corus Bankshares, the parent company of the failed bank, Corus had $2 billion in bad loans, including one commercial loan and 3 condo loans in Las Vegas worth $182 million.
As of the end of March, Corus said that the three distressed condo complexes in Las Vegas that it financed had 825 units more to be sold.
In its financial statement for the first quarter of 2009, Corus explained that it has been suffering from the harsh effects of the economic downturn and the subsequent difficulties of the residential real estate market and the financial services sector.
Corus admitted that it started experiencing severe financial difficulties since the last months of 2008 because the bigger part of its loan portfolio comprised loans provided to condo developers in places most battered by bank foreclosed homes: Nevada, Arizona, Southern California and South Florida.
These foreclosures, according to Corus, had pushed down the values of the collateral covering its loan portfolio. In the first quarter, Corus posted $301 million in total loss, which included a $209 million charge for loan losses.
One of the foreclosed Las Vegas condos formerly owned by Corus is the 275-unit Streamline Tower, which owed $108 million. When Corus foreclosed on the property, the complex had sold only 27 units.
Another distressed property is the 359-unit twin-tower called One Las Vegas, located along Las Vegas Boulevard and at the corner of Blue Diamond Road and Windmill Lane. Developer Midbar Condo Development LP owed Corus a total of $140 million for the construction of the two towers.
The developer of the twin tower project is also the target of a lawsuit filed by frustrated buyers in the Las Vegas District Court. The eight buyers named Midbar Condo Development including Corus subsidiary company 8255 Las Vegas Marketing Corp. as defendants in their lawsuit.
In other cities where Corus Bank provided residential and commercial loans, the number of bank foreclosed homes also increased as condo developers failed to pay their loans. Among the buyers of foreclosed Corus assets for potential resale were Related Companies, Crescent Heights, Colony Capital, Lone Star Funds, Starwood Capital Group and iStar Financial.
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