Tuesday, July 1, 2003 | 11:22 a.m.
Within a week late last month, Las Vegas-based mortgage lender Vestin Group Inc. and its subsidiaries foreclosed on two hotel loans valued at more than $28 million.
Following the company's June 19 foreclosure notice filed against Castaways Hotel, Casino and Bowling Center in Las Vegas, the Honolulu Advertiser reported that the company filed a June 25 foreclosure lawsuit against the Aston Waikiki Beachside Hotel.
Both of the foreclosures also involve co-lender Owens Financial, a California-based investment firm.
As of March 31, Vestin, through the two lending funds, reported a total loan portfolio of 118 loans worth $393 million.
Prior to the recent actions in Las Vegas and Hawaii, Vestin reported holding millions of dollars of real estate for sale following similar foreclosure proceedings, filings with the U.S. Securities and Exchange Commission said.
As of March 31, Vestin Group reported holding 10 properties valued at $8.7 million that it acquired through foreclosure proceedings. It's unclear whether Vestin was the main lender on each of those properties.
Also as of March 31, Vestin Fund I, a subsidiary investment fund, reported holding another seven properties acquired through foreclosure valued at $21.5 million. For the same period, Vestin Fund II, another subsidiary fund, reported holding seven properties for sale, valued at $17.4 million. Vestin I and II hold a percentage stake in many of the same properties, filings showed.
Vestin Fund I also reported five loans valued at $10.8 million that were deemed nonperforming after falling more than 90 days past due, as of March 31. Vestin Fund II reported two loans valued at $12.6 million were nonperforming for the same period.
As of March 31, 2002, Vestin and its subsidiaries reported no property held from foreclosure in its SEC filings. Vestin Group reported $4 million in loans that were 90 days past maturity and $3.6 million in loans that were 90 days past due on interest payments.
For the same 2002 period, Vestin Fund I listed two loans valued at $3.4 million with past due principal payments and Vestin Fund II reported one loan of $5.7 million with past due principal.
Vestin officials could not be reached for comment on whether the recent hotel foreclosures would affect returns to investors.
On June 18, Vestin also filed a lawsuit against Commonwealth Land Title Insurance Co. in Clark County District Court.
Vestin is seeking unspecified damages against the title company related to liens against the Arroyo Golf Club in Mesquite. The suit claims that Commonwealth Title refused to indemnify the lender against lien claims on the property despite the presence of a contract signed in 2001.
Vestin foreclosed on the golf course property in 2002 after developers defaulted on a $10 million construction loan.
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