LOS ANGELES – Farmers Insurance Group FCU has filed suit in Oregon seeking to foreclose on a $4 million loan on a commercial property, the latest California credit union being hurt by exposure to out-of-state member business loans.
The credit union is seeking the deed to the seven-acre commercial property and nearly $4 million plus interest, cost and fees from the owners of Melanie Square, in the town of Pendleton, according to court documents. The property has a real market value exceeding $1.8 million and it includes several businesses, Rite Aid, the Dollar Tree Store and Pendleton’s only bowling alley, Rodeo Lanes.
The lawsuit alleges Jones and Sturdevant haven't made monthly payments since April and haven't paid nearly $64,000 in property taxes plus interest for 2008. Farmers Insurance wants a judgment of $4 million plus 6.95% annual interest from June 12, 2009, until it receives the full amount, along with attorney fees and associated court costs.
Several other California credit unions have been reporting troubled MBLs outside of their home area. Recently, Telesis Community CU, in Chatsworth, Calif., filed default notices on $29 million of loans made on two Portland office buildings. The California credit union also began foreclosure proceedings last week on a $3 million loan funding an historic project, in downtown Memphis, Tenn.
