Another luxury development in trouble? Franklin loans questioned

Ruminations from the Distant Hills reports: In the November 4, 2009 issue of the Franklin Press, Quintin Ellison and Barbara McRae report that Macon Bank has filed lawsuits alleging it was "duped into making questionable loans in excess of $3.5 million" to buyers of lots in the 2200 acre Wildflower development north of Franklin.

[Alberto Gonzo]

I thought they said they didn't make any "risky" loans?

[Sandy G]

It says "Questionable" loans. You know Macon Bank wouldn't make risky loans. Yeah Right>>>

[Sandy G]

Oh, my apologies. They said they were "duped" and by their own closing attorney, how about that.

[Alberto Gonzo]

Sandy G wrote:

Oh, my apologies. They said they were "duped" and by their own closing attorney, how about that.

How does one get "duped"? When I wanted a mortgage, they were very specific, wanted details and proof of income, debt, etc. Maybe they were social buddies/friends or appeared to be "rich" bigwigs and overwhelmed the locals?

[sharon]

Sandy G wrote:

Oh, my apologies. They said they were "duped" and by their own closing attorney, how about that.

I went to the macon bank site and saw that their attorney is
Bowling Russel R in Franklin,NC .Then I checked out his site were he tells those looking at this, he is an experienced "real-estate" attorney. so........if the bank was "duped" by their own attorney...my next question is how good an attorney is he?
So far he does not sound that good.
Also, there was this story about the folks up from Fl. who were running a fake "by-land" deal.....they have done this sort of thing alot, by what the paper in NC said, as well as the Fl paper.They had purchased alot of land in and around NC. They both sounded like very shady folks.....like a "Maddoff" type.

[sharon]

12-16-09 Now there has been major slides.
If the county had had provisions that developers needed to follow already in place before this was approved for development....the lots sold, but no homes built, would not now have to involve the new lot owners having to pay for the developers mistake, or lake of responsibility....But since the county did not have this very important issue in place.....will the roads be fixed? If so by whom? At what price?
to whom? If the geologist report is correct....who many more slides should folks expect?
The developer not answering the question about is Wildflower in money trouble.....foreclosure...sure does not sound good. Who is going to build with out reassurance they will not have a slide come through their property....or house.....?
This whole thing sounds like a "hurry and make a mistake" plan. What a mess.
My only question would be to the county managment: at what cost is the hury worth and is the developement plans up to date?

[Lynne Vogel]

The North Carolina Real Estate Commission advises that Wildflower property owners are responsible for the subdivision’s private roads should Ultima Carolina, the developer, declare bankruptcy. Road ownership is transferred from the developer to property owners via a document titled the Subdivision Street Disclosure Statement.

Wildflower property owners were obligated to sign the following road conveyance document.

Sample Subdivision Street Disclosure Statement

Pursuant to N. C. G. S. Section 136-102.6 _______, as the Declarant of _______, issues this statement indicating that all of the roads within_______ are private. It is the obligation of _______ Homeowners' Association, Inc(hereafter "Association") to maintain and keep in good repairs all of the private roads in _______Subdivision. It is mandatory for all property owners in _______ to be a member of the Association and the property owners, with the exception of the Declarant, have an obligation to pay assessments to maintain the private roads. The Declarant specifically states that the streets have not been constructed in such a manner to allow inclusion on the State highway system for maintenance.

The standardized Subdivision Street Disclosure Statement which was authorized on October 1, 1975 was not intended as a disclosure document for hazardous-land subdivisions. The statute reads in part

"If the street is designated by the developer and seller as a private street, the developer and seller shall include in the disclosure statement an explanation of the consequences and responsibility as to the maintenance of a private street, and shall fully and accurately disclose the party or parties upon whom such street or streets shall rest...."

Stakeholders should take notice that there is no explanation of the financial commitment required on the part of property owners for the maintenance of roads built on landslide-hazardous soils.

Wildflower property owners should have received the following full disclosure statement:

Wildflower Steep Slope Subdivision Street
Disclosure Statement

Wildflower's private mountain roads were built on unstable soils. Landslides and erosion are recognized chronic hazards above a 15% slope. Soil assessments for the Wildflower subdivision can be found at the Macon County Soil and Conservation Office. Ultima Carolina, the developer, was not required to conduct geotechnical, hydrologic or soil suitability studies for this subdivision. Should this subdivision’s roads be damaged by predictable natural occurrences, the members of the homeowners’ association will be liable for all repairs.

[sharon]

Lynne Vogel wrote:

The North Carolina Real Estate Commission advises that Wildflower property owners are responsible for the subdivision’s private roads should Ultima Carolina, the developer, declare bankruptcy. Road ownership is transferred from the developer to property owners via a document titled the Subdivision Street Disclosure Statement.
Wildflower property owners were obligated to sign the following road conveyance document.
Sample Subdivision Street Disclosure Statement
Pursuant to N. C. G. S. Section 136-102.6 _______, as the Declarant of _______, issues this statement indicating that all of the roads within_______ are private. It is the obligation of _______ Homeowners' Association, Inc(hereafter "Association") to maintain and keep in good repairs all of the private roads in _______Subdivision. It is mandatory for all property owners in _______ to be a member of the Association and the property owners, with the exception of the Declarant, have an obligation to pay assessments to maintain the private roads. The Declarant specifically states that the streets have not been constructed in such a manner to allow inclusion on the State highway system for maintenance.
The standardized Subdivision Street Disclosure Statement which was authorized on October 1, 1975 was not intended as a disclosure document for hazardous-land subdivisions. The statute reads in part
"If the street is designated by the developer and seller as a private street, the developer and seller shall include in the disclosure statement an explanation of the consequences and responsibility as to the maintenance of a private street, and shall fully and accurately disclose the party or parties upon whom such street or streets shall rest...."
Stakeholders should take notice that there is no explanation of the financial commitment required on the part of property owners for the maintenance of roads built on landslide-hazardous soils.
Wildflower property owners should have received the following full disclosure statement:
Wildflower Steep Slope Subdivision Street
Disclosure Statement
Wildflower's private mountain roads were built on unstable soils. Landslides and erosion are recognized chronic hazards above a 15% slope. Soil assessments for the Wildflower subdivision can be found at the Macon County Soil and Conservation Office. Ultima Carolina, the developer, was not required to conduct geotechnical, hydrologic or soil suitability studies for this subdivision. Should this subdivision’s roads be damaged by predictable natural occurrences, the members of the homeowners’ association will be liable for all repairs.

wow..........so, Ultima Carolina, got the "ultimate" deal.....they sold land, homes to be built, roads put in, homeowners required to take full responsiblity. Not bad.
Unless you are a "new" homeowner, or one that is not up on all the rules, regs.Hopefully those reading this will know it is "buyer beware". I guess those that are worried and have not built....should not.
Thanks for the rules and regs. I will pass them on.