Court blocks foreclosure in Interstate Mortgage case

Grace Leong

Tuesday, Sept. 12, 2000 | 11 a.m.

Consolidated Mortgage Corp. won a temporary restraining order Friday from Clark County District Court Judge Nancy Saitta to stop insolvent Interstate Mortgage Group Inc. and 34 investors from foreclosing today on part of a 40-acre Las Vegas property.

The northwestern Las Vegas land is bordered by Grand Teton Drive on the north, Whispering Sands Drive on the south and Bradley Road on the east.

Consolidated Mortgage sued IMG and 34 investors in Clark County District Court Friday, alleging they refused to reconvey a deed of trust on 16.71 acres of the 40-acre parcel executed in favor of IMG by Grand Teton LLC, even after Consolidated Mortgage paid $1.25 million to satisfy part of a $2.5 million IMG loan.

IMG, through its investors, had loaned $2.5 million to Grand Teton and taken as collateral the 40-acre property, said Doug Gerrard, Consolidated's attorney. IMG wanted to foreclose on the entire property because Grand Teton had defaulted on the remaining $1.25 million loan secured by the IMG deed of trust.

"We filed the lawsuit also to establish that IMG shouldn't have any rights to foreclose on the 16.71 acres. If IMG wants to foreclose, they should foreclose on the 23.2 acres," Gerrard said.

A hearing for a preliminary injunction barring the foreclosure action is set for Sept. 18 in Clark County District Court.

The suit said Champion Homes allegedly borrowed $2.04 million from Consolidated Mortgage to acquire the 16.71 acres from Grand Teton. Consolidated Mortgage allegedly agreed to make the loan to Champion on condition that part of the proceeds be used to pay off a portion of IMG's $2.5 million loan secured by the 16.71 acres, Gerrard said.

IMG was seized Nov. 2 by the state Financial Institutions Division, which cited a loss of collateral securing $5.7 million in loans because IMG released seven liens to Champion Homes on a different project without having been repaid for the loans.

George Swarts was named received of Interstate by the state agency. Aviva Gordon, Swarts' attorney, declined comment on the Consolidated lawsuit. Grace Leong

is a business writer for the Sun. She can be reached at (702) 259-2326 or by e-mail at gracel@lasvegassun.com.