Jeff P wrote on January 24, 2009 01:07 AM: I agree that this is definitely an unfortunate situation for all involved. BUT! DONT YOU THINK IT WOULD BE THE RIGHT, MORAL, AND OBVIOUS THING TO DO BY AT LEAST MAKING SOME EFFORT TO NEGOTIATE WITH THE SENIOR CITIZEN INVESTORS WHO FAITHFULLY BELIEVED IN YOU AND TOOK THE RISK. IS IT FAIR THAT THESE FOLKS WHO ARE AGED 68 AND OLDER BE SCARED AND TOLD THAT THEY MAY NOT LIVE LONG ENOUGH TO SEE THEIR MONEY IF ITS GOING TO BE 6 YEARS. MOST OF THEM WHOSE MAIN OBJECTIVE WAS TO HELP SUPPLEMENT THEIR RETIREMENT INCOME AND MORE THAN THAT A DREAM OF TAKING THERE RETIREMENT NEST EGG AND MAKING IT GROW A LITTLE BIT SO THEY COULD BE PROUD OF THEMSELVES TO HAVE SOMETHING THAT THEY COULD LEAVE TO FAMILY MEMBERS. HOW DO YOU SLEEP AT NIGHT WITH THIS ON YOUR CONCIOUS?

Elsie wrote on March 14, 2008 09:15 AM: Jon, of course it will vary parcel by parcel. My estimate was based on my hearing that vacant land distant from Phoenix is selling at 30c on the dollar of peak prices, knowing that when these loans were made they were all appraised about double the loan amounts (50% LTV is pretty common for the brokers to tout on these junk loans, and a little optimism. Perhaps it would be 60c on the dollar of debt, which would equate to 30c of peak price and a 50% LTV. At some point, a solvent developer or speculator would step in and buy the collateral, and the lenders would get some cash out. Then they could proceed against the corporate entity and the personal guarantee to get whatever they could from those and in the end recover a little more.

The point is, the creditors would be able to reinvest their remaining capital in sound investments, returning current income, with a greater certainty that over time they could recover, rather than to just shrug and say to the borrower, "OK, you got my money, now you can keep it for 6 years and hope things get better with no cost to yourself, and hey if it doesn't work out you can stick me with the loss later."

The worst thing in all of this is that the little guys who put up the money are not being represented by anyone with their best interest at heart. The mortgage brokers are not doing it, they are looking out for their future business and ability to originate more loans and collect fees. The little guys need to organize and hire workout experts to deal with all this, as done by a creditors committee in a bankruptcy.

Jon H. wrote on March 14, 2008 07:09 AM: Elsie wrote: "A recovery of 80c on the dollar of what is left is far better than 6 years of no income."

Elsie, what makes you think that the hard money investors would recover 80 cents on the dollar? How did you arrive at that number?

Elsie wrote on March 14, 2008 06:03 AM: This is time for the mortgage brokers who lured senior money in with their ads promising 12%-14% secure returns at 50% LTV to earn their fees by representing their lenders, foreclosing, liquidating, and suing for deficiency judgment against the company and the personal guarantee, to get whatever they can for their clients. All that needs to be done while there are some assets left to be taken. Otherwise, the few who have already chosen to foreclose will get paid off, so that those left can pay for the free speculation for the next 6 years with what's left.

A recovery of 80c on the dollar of what is left is far better than 6 years of no income.

There was greed all around here. Greed on part of investors who knew that there was a reason they were being paid 12% when banks paid only 5%, greed on part of the mortgage brokers who underplayed the risks and pumped appraisals to roll over bigger and bigger loans on land to collect more origination fees, and greed on part of Focus who realized that the more you owe the more you are in the drivers seat and the lenders have the real problem.

Elsie wrote on March 14, 2008 05:55 AM: If interest payments are suspended, why should the interest rate go DOWN and not UP? The lenders, many of whom are senior retirees who are now learning the hard reality of the risks they took, are being told to take whatever crumbs Focus agrees to throw them, and being threatened that if they don't, they will lose because of the costs of foreclosure and resale.

No wonder some of the lenders have opted to halt negotiation and file NODs to begin foreclosure. The rest who are in bed with Focus will tell their clients who put up the money that they should go along, and this is the best deal available, so they can preserve their cozy relations with Focus.

This proposal is a one sided insult to the lenders, who were told that the loans were personally guaranteed by Ritter, who had a huge personal net worth to back them up. Now, if the proposals are accepted, the lenders will give Ritter a free ride so he can sit for 6 years and see if land prices recover. He has nothing to lose! If things work out, he sells, pays off the loans, and walks with most of the profits. If not, he says go foreclose anyway, after he has had 6 years to preferentially treat his buddy creditors, and organize his affairs to make himself judgment proof.

Once such a deal is agreed to, Ritter has total control and the lenders have nothing to say about what happens. He can choose to wait as long as he likes, with no consequences of waiting other than a 6% deferred interest cost which may never be paid anyway.

Hahnz wrote on March 12, 2008 08:07 PM: Take a lesson in this perspective.....http://www.focuspropertygroup.com/press_08.01.24_1.html

O'Sal wrote on March 12, 2008 06:43 PM: Excellent point Joe T....thank you for instilling the fact and my confidence some people out there are not all 'chicken little's'...

Joe T wrote on March 12, 2008 04:41 PM: Take a look at this in Forbes - it seems that John Ritter might know what he is doing. Number #1 and #5 master planned communities. So much for the Wild West

http://www.forbes.com/prnewswire/feeds/prnewswire/2008/03/06/prnewswire200803060600PR_NEWS_USPR_____LATH517.html

Jon H. wrote on March 12, 2008 01:25 PM: tht . . . interesting comments.

I have not detected any evidence that a pyramid scheme was at the root of Mr. Ritter’s development plans. What I see is a downturn in the housing market, that was caused in great part by aggressive speculation and loose lending practices by the lending institutions.

With regards to your comments on New Urbanism, as related to public transportation, I must point out to you that the seven city or village centers coupled with a pedestrian friendly plan provides the opportunity to have public transportation drop off and pick up people at those planed city centers. As long as the bus stops meet the general Pattern requirements, as described by Christopher Alexander, I do believe the existing plan will work. It just means that each city center must include some business core, so the bus stop will be just outside a Starbucks or Deli.

With regards to the Casino, lets face it, they have become a civic center for movies and dining all through Clark County. Just do as I do, don’t gamble, and enjoy the rest.

As for the revitalization of the urban cores, that takes a great deal more as emanate domain will not work. Lets face it, it costs money to buy out all the existing owners and even more money to remove all the blighted real property, as compared to a green field development. Now, if you follow what Detroit is doing, you will find that entire city blocks are being condemned by the city and are being turned into farm land. In twenty years, that farm land will be developed once again. Clark County could do this, Mr. Ritter could not.

ths wrote on March 12, 2008 09:37 AM: Jon, the problem is Ritter is nothing but a speculator and he lost on the back of other speculators. We call that a pyramid scheme. If his speculators got hurt he should as well.

I am not doubting the concept of New Urbanism, but at the same time many disagree with his anchoring a community with a casino. Also the fact that he buys the land on the edges of town and then pumps up New Urbanism instead of revitalization of the urban cores is a little bit double talk.

I have studied New Urbanism and his developments are only half way there to new urbanism. The word is often used for the excuse of higher densities over the true design philosophy. Road, mass transit and other concepts of new urbanism are missing from his plans.

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