Tuesday, Nov. 03, 2009

114 local properties foreclosed upon in single lawsuit

About 114 properties owned by a major homebuilder in O'Fallon and Shiloh have been foreclosed upon by the Bank of America, according to court documents.

The Bank of America filed a lawsuit against Mayer Custom Homes, Inc. of St. Louis on Oct. 5 in St. Clair County Circuit alleging the company owes more than $42 million to the bank as of the beginning of October.

Mayer owes $40.9 million in principal and $1.37 million in unpaid interest to the bank from a loan used to purchase homes throughout the metro-east, according to the Bank of America’s complaint. In May, Mayer announced it would close citing low sales and high costs. The company still employs a small workforce and had not returned a request for an interview as of presstime.

O'Fallon City Administrator Walter Denton said the foreclosures did not dampen city officials' confidence for residential development in the area.

Denton said the city was encouraged because local home builders, such as Huntington Chase Homes, have purchased some of the available lots.

"All the infrastructure has been done up there and it’s prime lots," Denton said. "It's a nice neighborhood. We are encouraged local homebuilders are buying up some of these lots and building on them. It’s nice that they are not just going to sit and be owned by a bank."

Shiloh Mayor Jim Vernier said his main concern was the upkeep of the foreclosed properties and he believed homes would eventually be constructed on the site.

"There is another area in the community where the banks own the lots. Eventually, they will be built on," Vernier said. "The infrastructure is all in...and those are very expensive items to do, especially if the home builder can pick those (properties) up at a discount and pass those savings on to the home buyer."

Mayer Homes sells high end custom homes throughout the St. Louis region, including St. Clair, St. Louis and Jefferson counties.

The foreclosure includes 49 properties in the Greystone Estates subdivision along Green Mount Road in Shiloh and 65 properties along Bristol Hill Drive and within the Windsor Creek subdivision along Milburn School Road in O'Fallon.

Mayer Homes advertises homes for sale between $180,000 and $325,000 within the Windsor Creek subdivision and between $150,000 and $300,000 within the Greystone Estates subdivision.

The company is currently advertising on its Web site a "display and liquidation sale," featuring homes in O'Fallon and Shiloh with the original sales prices lowered more than $58,000. For example, a home in the Greystone Estates subdivision previously listed for $370,267 is now available for $312,250.

dkelley@bnd.com