Santiago Canyon Tract of 117 Acres to Be Sold in Court Foreclosure
- Share via
SANTA ANA — In a telling counterpoint to Election Day rhetoric about a recovering economy, a 117-acre residential tract in Santiago Canyon is scheduled to be sold in a foreclosure auction at Orange County Superior Court this morning.
The sale, to take place on the courthouse steps in downtown Santa Ana at 9:30 a.m., was scheduled after owner D.T. Smith Properties Inc. of Los Angeles, a major Southland residential builder for the last decade, defaulted on a pair of trust deeds.
A spokesman for D.T. Smith said the property is no longer worth the $9.7 million that his company agreed to pay when it acquired the raw land in 1988. The foreclosure notice on the property lists its current tax value at $6.2 million--36% less than Smith paid.
D.T. Smith’s default, the spokesman said, occurred after the company’s lender, C.H. International Overseas Ltd. in Cyprus, filed for bankruptcy in that country.
D.T. Smith has borrowed more than $6.6 million from C.H. International, using the land as collateral. That loan is not in default. Instead, D.T. Smith has defaulted on two separate loans from a previous lender totaling $950,000.
The Smith spokesman said his company’s loan agreement with C.H. International called for the Cypriot lender to pay off the earlier mortgages and that Smith is in the process of filing a claim against C.H. International.
D.T. Smith had planned to build as many as 160 homes on the property, located off Santiago Canyon Road just north of Portola Hills.
“We are letting it go because we are in a recessionary market, have a decrease in the property value and a problem with the lender being in bankruptcy,” the spokesman said. “We just don’t have the facilities to go forward with the project.”
He said that D.T. Smith does not intend to file a last-minute reorganization petition under federal bankruptcy law to stave off the foreclosure--a common tactic when a property owner who has defaulted on the mortgage wants to try to keep a piece of land.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
