Foreclosure is often considered a risk only for those of limited means, but the reality is that under the right (or wrong) circumstances, even the most extravagant homes can end up being seized by their lenders. Such a story is unfolding right now in Los Angeles, where in March the ambitious developer of the mega-mansion in Bel-Air referred to as “The One” was served with a notice of default by Hankey Capital, from whom he borrowed $82.5 million to help build the home. The developer failed to pay or renegotiate the debt within the allowed 90-day period after the notice, sending the home into court-ordered receivership.
For a home that hasn’t yet been completed, the infamous real estate development has gotten more than its fair share of press over the years. It is considered both the largest property in the urban world and the most expensive home in the United States. Developer Nile Niami, known for wildly upscale real estate projects with unusual amenities, was widely considered to have outdone himself with his plans for The One. The 105,000-square-foot property sits on an eight-acre lot and boasts 21 bedrooms, 42 bathrooms, and a 5,500-square-foot master suite.
In addition to the expansive living area, the property features seven swimming pools, a full spa, a 32-seat home theater, a 50-car garage, a full-size nightclub, a race track, a four-lane bowling alley, a tennis court, and a wine cellar capable of holding 10,000 bottles of wine. A video tour of the property posted in April claimed that the home was just weeks away from completion, but the property has never officially hit the market.
The project has been under development for over 10 years, with plans to originally list it in 2017 at $500 million. More recently, the price was slashed to $350 million. In addition to the amount owed to the lender, the property also has $2 million in unpaid taxes as well as outstanding invoices to contractors and other vendors.
The receiver, tasked with accounting the debts against the property, readying the property for sale, and ideally, repaying the lenders and creditors with the proceeds from the sale, has indicated there is still extensive work to be done on the property and that it is not ready to be brought to market. It’s unclear if the unique property, with its dizzying array of high-end features, will bring in enough to settle all of the debts amassed during its development.
A notice of default does not mean that foreclosure is inevitable. What it is, however, is a sign that you have to work fast to keep your options open. An overextended developer like Niami, who had also received default notices on other properties as his time ran out to finish The One, may not have had the means to negotiate an agreement that would satisfy his lender. However, ordinary homeowners usually have other options that may help to keep them in their homes even when they’re struggling financially.
Some alternatives for homeowners in distress include loan modifications, forbearance, and repayment agreements, but it can be difficult to determine which course of action will be best for you and your family. In some cases, a strategic foreclosure may be the best choice to relieve you of an obligation that you simply can’t pay any longer. An experienced foreclosure attorney like the ones at Sternberg Law Group is essential for helping evaluate your situation and choices and helping you pursue your best alternative.
Expert legal representation can reduce the stress and expense of facing a foreclosure alone. Sternberg Law Group has been representing Southern California families at risk of losing their homes since 2009. We can advise you on the pros and cons of the range of choices for financial relief, ensuring you have all the information you need to make the choice that is right for you. Our services are available in English and Spanish, and we offer a free initial consultation to discuss your situation. To contact the most experienced mortgage foreclosure lawyer near you, more about how Sternberg Law Group can help, or to schedule your free initial consultation, contact us here.