Far East National Bank has filed a lawsuit against the owners of the Fresno, California-based Piccadilly Inn Hotels. The bank has asked the courts to order a foreclosure on the properties, which could result in three of the hotels being added to the REO properties for sale list of Far East in the near future.
The hotels reportedly became Fresno pre foreclosures due to unpaid loans worth $27 million. The lawsuit was filed by Far East at the Fresno County Superior Court, seeking foreclosure proceedings against three of the hotels under the Piccadilly name. According to reports, the bank initially provided three loans to the owners of the hotels in March 2007 totaling $28.7 million.
The loans were reportedly provided to the owners of the Airport Piccadilly Inn, the Piccadilly Inn in West Shaw Avenue and the Piccadilly Inn Express. With the area already suffering from a high number of California pre foreclosure homes, local housing market observers are not savoring the idea of having the three hotels under foreclosure.
In California, REO properties for sale are not just residential structures, commercial buildings, hotels and other real estate properties have also come into the foreclosure market because of owners' failure to pay their mortgages. In the case of Piccadilly, Far East has claimed in court documents that the owners have not made any loan payment since November of last year.
The possibility that the three hotels will end up foreclosed is not something new in the state which has seen huge numbers of foreclosure houses for sale coming into the market almost every month. However, a possible foreclosure in this case is expected to have a significant impact on the commercial real estate of the area.
Far East lawyers have also filed court documents stating that the mortgages were deeds of trust-secured. They also accused the owners of the properties of breaching agreement that clearly specified the need to pay the loans. The bank's lawyers have requested that a receiver be appointed for the hotels.
Whether the hotels will end up as REO properties for sale will be known to the California real estate industry in the coming months as a lawsuit has already been filed on the court by Far East National Bank.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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