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Report: #1364774

Complaint Review: Pacific Continental Bank - Eugene Oregon

  • Submitted:
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  • Reported By: Jeff and Nicole Blackman — White City Oregon USA
  • Author Confirmed What's this?
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  • Pacific Continental Bank 111 West 7th Avenue Eugene, Oregon USA

Pacific Continental Bank aka Columbia Bank Did not finish job through to completion Eugene Oregon

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Preface and Disclaimer

 (Please do not ignore!)

It has become extremely important for me to write a preface and disclaimer to our 21-page document/ consumer complaint for a few reasons, which I will list below. It will do you, the reader / consumer, a great injustice in my opinion, if you skip this section and then proceed to read the entire 21-page story. If you plan on reading the entire story, you may as well read this entire preface and disclaimer as well, because I’ve recently come across brand new information which I personally feel is urgent for me to communicate to you and I wanted to get this information out as soon as possible. That being said, I would like to comment on four brief subjects prior to the story:

 

  • First, I would like to address any (potential) judge or juror who should come across this as a result of any litigation against us for simply expressing our first amendment right. Let it be known that I have taken great strides in being cautious with how I present this story to the public and I would ask the court to recognize that I am presenting this story as if I am in your courtroom, with the utmost respect.  I want it to be abundantly clear that the intent of this story is to simply tell what happened, present the truth and get it out to the public. Our intent is not retaliatory in any way but I want to relay something which has happened to us and the public has a right to know this information.  Therefore, I address you foremost, your Honor and/or Jury, because I am fairly confident that the company I am writing about, which is Pacific Continental Bank, could very well file a so-called defamatory suit against us for simply telling our story and publishing it.

     

     

    So, it is with great care that I divulge my intent which is to present our story and that you would consider this Preface and Disclaimer, should you come across it through your public service.  We should not be fearful of consequences in putting the truth out there, even if it means being sued and this is why we are willing to be sued because we want the truth out there. Please understand that our intent is not to provoke the bank with that statement; we aren’t sending them an invitation, and in fact, we don’t want to be sued but again, the public should at least know about this story. More evidence of great care in preparing this story is the fact that I have contacted two different law firms and received paid legal advice with regard to publishing this story, once on August 23rd 2016 and also on February 23rd 2017. We would ask the court to please consider the legal advice we received in advance of publishing this story, to additionally be considered as exercise of great care upon the court’s review of our intent. As you will see in the story, we essentially have no fruit to show for our efforts –nothing tangible.

    The only thing we have left to show for our time is truth itself or the intangible spirit of truth really, and we refuse the spirit of truth to be taken away from us by Pacific ContinentalBank.

 

 

  • The second thing I need to address is that part of this story involves an eventual bankruptcy which was discharged on March 1st 2016. I owe the reader/consumer an explanation as to why we waited a little over one year to publish this story. It is very simple but you need to know…The reason we waited a one-year minimum is because in a chapter 13 bankruptcy discharge, if fraud has been discovered or even suspected (from my understanding) within one year of discharge, a creditor can try and reverse the discharge through the courts…Now, please understand we haven’t committed any fraud, but we don’t trust that the bank wouldn’t try a retaliatory tactic to this publication and make our lives miserable by filing something with the bankruptcy court and potentially forcing us (I suppose) to fill out mountains of paperwork and/or force us to produce documents that are years old.

     

    This would be extremely trying in addition to what we’ve already been through and we frankly don’t trust that they wouldn’t pull something like that in retaliation. We simply did not need the added stress of proving a false accusation wrong. Therefore it has just been easier to wait the one year than to have to prove any potential false accusations. We don’t know whether or not they would have retaliated in that manner, but we simply couldn’t take any risk of that whatsoever and, quite frankly, that’s how much we distrust them. This is why our story is posted after March 1st 2017.

 

  • Third, we have a couple pieces of information which we recently found out about. The first piece is that Pacific Continental Bank is potentially merging with Columbia Bank out of Tacoma, Washington, under a merger according to a letter I received from Pacific Continental Bank dated January 9th 2017. On Columbia Bank’s website at www.columbiabank.com it shows or did show the merger as an “Acquisition of Pacific Continental Corporation” which is the parent company of Pacific Continental Bank. It also states on Pacific Continental Bank’s website under “Media Kit” that Pacific Continental Bank is the operating subsidiary of Pacific Continental Corporation.”  With this recent information of a potential merger, I would like to state publicly that as a shareholder, if I personally have the chance to vote against the merger I will do so because of what they did to us as a customer of theirs.

    However, since this story has nothing to do with the merger and the merger was just recently announced, it would be unethical of me to try and dissuade other shareholders of either bank from not approving the merger and it should be left up to each individual shareholder to decide for themselves whether or not they want to approve the merger regardless of whether or not they read our story. I would also like to point out that Columbia Bank has not wronged us in any way so even thoughthey are mentioned because of the potential merger with Pacific Continental Bank, they have no wrongdoing of any kind in this story and we have no issues with Columbia Bank. It’s unfortunate that I have to bring them up at all, but because of the merger I must make mention of them.

     

    The reason I even address the merger in this preface is because the timing is so unfortunate with regard to this publication and it indirectly adds insult to injury to us, because they got away with what they did to us and then just get to change their name and move on, away from scrutiny of the public eye. The merger gives me this feeling of everything they’ve done to us being swept under the rug and moving on under another bank name and not being held accountable in the public eye.  I wanted the public to understand why I personally felt it was important to bring it up. Besides the merger announcement on January 9th 2017, the second recent piece of information I have is that Pacific Continental Bank has also recently agreed to settle a class-action lawsuit where they were named as one of two banks along with an accounting firm, who were accused of contributing to a Ponzi scheme.

     

    According to OregonLive.com which is run by The Oregonian newspaper, Pacific Continental Bank agreed to pay $4.9 million dollars as their portion of a larger settlement which appears to be somewhere between $17 million and $18 million dollars combined. Oregonlive.com stated in the article which is dated January  26th 2017 (less than three weeks after the merger announcement)  that … [The tentative deal calls for Umpqua Bank to pay $11 million, Pacific Continental Bank to pay $4.9 million and Eugene accounting firm Jones & Roth to pay $1.25 million. Summit Bank has agreed to pay $90,000. Thomas Huntsberger, the Eugene trustee appointed to oversee the Berjac estate, said the banks’ financingof Berjac was “an essential component to the continuation of the Ponzi scheme.”] Again, for me the timing of this merger is so unfortunate with regards to our story so I had to address the merger.

     

     

    Whether the merger has anything to do with getting the focus off the Ponzi scheme and reported settlement is anyone’s guess but I think once you read our story you will understand the position I’m taking on the merger issue, and that’s why I brought up news of the Ponzi scheme settlement as well.

     

  • Fourth, I’ve been in touch with Consumer Reports for the last year and a half regarding our story and they’ve told us they feel our story is “very compelling” and they gave me specific permission to relay that information to the public for this story. However, they said they are unable to publish our story at this time. I happen to know the reason why they can’t publish it at this point in time and they’ve stated to me that if anyone wants to speak with them about our story they would be happy to speak to you about it. If anyone wishes to contact Consumer Reports about this, please contact me, I will relay to my contact at Consumer Reports your name, company or organization and contact information and then they will contact you. If anyone wishes to contact me with regards to this story or wants me to get a hold of my contact at Consumer Reports, please feel free to do so by e-mail at:  ourbankstory@yahoo.com . I will likely only respond to inquiries regarding this story for a limited time. I haven’t determined exactly how long I will respond but I am committed to at least 90 days from date of this publication.

     

Before we get to the story, let me just say that If you are considering filing bankruptcy in Oregon, we highly, highly recommend Matthew Casper of Olsen Daines at (541) 770-5731.             (We were not paid to say this, this is how we really feel)

 

 

 

 

 

 

 

Legal Disclaimer:

The author herein is expressing opinions based on personal experiences; however the author does believe everything in the story to be 100% truthful and as accurate as possible; that is not to say the author believes with supposition, but believes with genuine sincerity, feeling sure of the truth. Some numbers were rounded for easier conveying of mathematical equations and some ball-park figures were used as well. The author makes no representations as to the effect of these opinions and expressly disclaims any responsibility for the interpretations of these opinions or experiences by private individuals, representatives of organizations or of companies who may read the following story.

 

 

Our residence sits at the end of the street and coming and going, we pass by these other lots and are reminded daily of how our land was essentially taken from us without a fair shot; the homes representative of some seemingly immovable, dangling carrots placed in front of us, just out of reach.”       -  Jeff Blackman

                                                    

                                                                                                                                                                     Page 1

THE UNRAVELING: MECHANICS OF A PACIFIC CONTINENTAL FAILURE

By Jeff & Nicole Blackman

SUBDIVIDING MADE EASY

In late 2003 and early 2004, we began looking into the possibility of having a new home constructed on our property located in White City, Oregon. Our lot size was only 0.66, just two thirds of an acre. We had seen ads about Adair Homes in the newspaper and had also heard good things from people about how affordable they were. We decided to call them and we got directions and looked at some of the model homes which they had on display in Eagle Point, just a few miles away from where our property was located. At the time, we were living in a 1973 Fleetwood mobile home. We wanted something bigger, newer and definitely frame-built.  A few days after looking at the homes, I called back and spoke to someone at Adair Homes. They mentioned something about the county having just adopted a re-zoning ordinance where our property was located, changing the zoning from SFR-1 to UR-8 (Single family residence / Urban renewal; 8 homes per acre). We were aware of the change and in fact the ordinance had been appealed to the Oregon Land Use Board of Appeals or LUBA recently, but was upheld. He mentioned that we might want to consider having more than just one house built since it looked like there would be room for more homes.

 I told him that we would consider it and that it sounded like a great idea. The gentleman I spoke with at Adair Homes said I should call the general manager, Scott Madsen, at their sister company Adair Financial Services located in Vancouver, WA. He thought if I called them that they might have some ideas or could put something together to see if we could subdivide the property while utilizing Adair Homes as the builder. After talking with Adair Financial at length, he told me he would talk to Pacific Continental Bank, (a bank he had dealt with a lot) to see if this was a project they could financially accommodate. Regardless of whether Pacific Continental Bank (soon to possibly be Columbia Bank) could help us finance a subdivision or not, we knew we wanted to, at the very least, have a new home built. Shortly thereafter, we signed a building contract with Adair Homes. Adair Financial was acting as a broker and relayed to us that Pacific Continental felt it was a project they could take on.

 

                                                                                                                                                                            Page 2

WHERE TO BUILD IT

Part of the contract stated that in order to keep the builder’s costs down, we as owners had to participate in the building process to some degree.  Some of our involvement included deciding exactly where on the property the home would be built and also included cleaning up after each subcontractor performed their work.  We had to be very careful where to build our home in order to allow room for the other investment/rental homes which would in turn have to meet their own minimum setbacks.  Since our goal was to divide two-thirds of an acre (0 .66) into four lots and still dedicate some of it for the public street, we couldn’t be careless on the placement of our new home. Since the property was so small, even a one-foot misplacement of the home could potentially offset what would become our other lots, causing them to possibly fail to qualify in meeting the minimum county requirements for lot sizes and setbacks. The reason this falls into the county requirements and not the city is because White City isn’t incorporated and actually sits on the remnant of what was once the U.S. Army’s Camp White.

 

 THE PRIMARY DWELLING

Overall, the building process on our home went fairly smooth.  We knew ahead of time that the construction loan would not automatically convert to a permanent loan, but we weren’t worried about obtaining a new loan to pay off the construction loan because property values were skyrocketing and we knew there would potentially be a lot of equity when the home was completed. It should be noted that during the course of construction, I was responsible for putting in the draw sheets to Pacific Continental Bank each month. I mention this because during the course of construction, the bank allowed draw funds for things outside the scope of building the home. In this instance they were allowing us to use funds to pay for consultation and planning on the subdivision in order to determine if in fact all four (potential) homes would fit into the 0.66 acres while meeting all setbacks. 

 

FINAL INSPECTION

In January of 2005, the final inspection was done on the home and we were allowed to move in. Right after moving in, we obtained another loan in order to pay off Pacific Continental Bank, who was the construction lender on the home.

                                                                                         Page 3

A SUBDIVISION IN QUESTION

Upon the completion of our primary residence, we called Adair Financial again to see about getting the infrastructure financed.  There was now a new gentleman there I would be dealing with and he talked to Pacific Continental Bank and it seemed like he had to kind of twist their arm a little to get things rolling but within a few months Adair Financial had convinced the bank to get the project funded, so long as we provided all the bids to the bank showing a realistic budget. The balance on our new home at this point was much larger now than what it would have been had we not sought consulting and planning with relation to the subdivision during the construction period. However we didn’t mind because we sought to do the project and again the bank allowed draws for those subdivision-associated costs. Had they not continued at this point we would have a larger balance basically for nothing. Finally I received a call from Adair Financial and a line of credit for $130,000 was available in order that we could begin construction.

INFRASTRUCTURE

Being a first-time developer wasn’t without challenges but we were able to make things happen. One thing we learned during this process is that for every day which something was delayed, it would cost a week’s time. Over all, the infrastructure involved essentially building the street, installing the water and sewer lines, plumbing the electrical conduit for future street lights, pouring sidewalks, paving, and putting in a temporary turn-around easement. The mobile home which we had previously lived in was on a well. In order to keep the well while we were putting in the infrastructure, the Medford Water Commission required us to use a higher grade of pipe for the main water line. This added extra cost but it was the only way to legally utilize the well water for continued use into the future.

COUNTY THORN

The only real hang-up during the infrastructure was literally the day that we were supposed to have the road paved, an official from Jackson County Roads and Parks stopped by and told the road crew that they must halt the project and essentially cease and desist paving until a problem which he deemed necessary to fix was resolved in relation to rainwater drainage. The edge of the road was a couple feet higher than one of the neighboring properties and this was still a concern to the county. My engineers originally drew in a French drain to resolve any water issues and Jackson County had even approved the design but for some unforeseen reason the Roads and Parks official was not satisfied that the water drainage would be sufficient. Therefore, I had to pay my design engineers more money to draw up a plan which was more satisfactory to the county, and get it reapproved and have the issue fixed. Ultimately the new design included putting in a retaining block wall filled with pea gravel in order that the side of the roadway would not collapse due to excessive rain while still providing drainage. The new design also included a perforated curb with breaks in it for any excess water to get past the curb and over to the open top of the block. Unfortunately we didn’t have the budget in the line of credit to accommodate these additional costs. At this point, we incurred overages in order to pay for the unexpected block and the labor to install it. We also had to pay to transport the paving equipment back out to our jobsite again.

                                                                                                                                                                            Page 4

THE PRIZED LOT

I can’t stress enough that we knew that our success on the whole project rested on what would end up being lot 4, the lot which we would have our final build on. This would be what we considered our prized lot. I point this out now because there would be a lot of money tied up in the infrastructure and building costs.

  

LOT RELEASES

When the final plat map was recorded with the county, the lots would finally be legal to build on. However, up until recording the final plat, Pacific Continental Bank had been acting in second lien position on all of the property because there was still a first lienholder on our primary residence. We ended up having to refinance our home twice in as many months in the process of getting the lots released. In addition to refinancing our home twice in a two-month period, we actually had to obtain a second mortgage on our primary residence in order for this to work out. Time was of the essence with relation to Pacific Continental Bank and the first lienholder signing off on the newly created lots.  It was a very complicated process and had to be done a very specific way to satisfy both lienholders. The loan officer/processor we dealt with at Adair Financial did a great job of walking us through the whole complicated process. The lienholder on our primary residence wanted assurance that the new, smaller lot of just 0.17 would still be worth what it was when it encumbered the entire 0.66 acreage before agreeing to the releases. Ultimately, both banks signed off on the lots. At this stage of the game, we now had a first and second lienholder on our (now smaller) primary residential lot. Pacific Continental Bank was not tied to our primary lot anymore and conversely, Pacific Continental Bank would be the only lienholder on lots 2 and 3. Lot 4 was now free and clear.

 

 LET’S BUILD

Once both lenders signed off on the lots, I got with Adair Financial again to see about obtaining funding for the construction of the three investment homes.

 

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TWO, NOT THREE

Within a few days, Adair Financial got back to me and stated that due to our contract terms with the builder in relation to our owner-involved responsibilities, Pacific Continental Bank felt it would be too much for us to take on three homes at once and that they would only finance two of the three builds (at this time) Once those two were done, we were told they would finance the remaining home. Worth noting is the fact that Pacific Continental Bank still insisted on doing appraisals for each of the two homes prior to their construction just to make sure there was still enough equity.  (The homes appraised just fine at $305,000 each, according to Adair Financial). The construction of both homes went fairly smooth and there were no major hang-ups of any kind. A most crucial thing to understand here is that Pacific Continental Bank had taken the balance on the line of credit from the infrastructure and divided it in half and then added each half to the building cost of each home. This absorption of debt made sense to us. We understood that if they didn’t incorporate the line of credit, then there would be no security to tie the infrastructure costs to. The absence of any unsecured debt In turn could raise eyebrows from any potential lenders when we sought to pay off the construction loans with permanent loans. Similarly, as the line of credit would be incorporated into the balances of lots 2 and 3, the same idea abounded in bringing a portion of the balances on lots 2 and 3 over to lot 4 when it was time to construct the final home. In doing so, all three homes would then have the same approximate balance and would enable us to then seek permanent loans to pay off the construction loans on lots 2 and 3.

Noteworthy however is the fact that by Pacific Continental Bank only doing two of the homes at this juncture, instead of simultaneously spreading the infrastructure debt to lots 2, 3 & 4, would cause lots 2 and 3 to retain a much higher loan-to-value ratio, obviously because the balances would be bigger. In my own estimation, I would like to point out that Pacific Continental Bank would prove to be taking on a troublesome risk here not just for themselves but I would assume for their investors as well because if the real estate market were to go down significantly by the time lots 2 and 3 were completed then it could leave us with loan-to-value ratios too high for any conventional lender to even consider. That in turn would mean we would have no way to pay them off. This was especially true since the opportunity presented itself in doing lot 4 at the same time as lots 2 and 3. Not that our project was large-scale by any means but in my opinion it was still likely part of the bank’s loan portfolio to some degree, and after the way we spearheaded the infrastructure project, doing three homes at once would not have been an issue for us.

However, they were the financier and they alone called the shots. We had no say this far in. If we didn’t agree to do just two homes, we would be left with a $130,000 infrastructure line of credit with no way to pay it off.  The aforementioned practice of spreading debt would assuredly have to be done a second time around when the time came in order for this to work out and could spell major trouble if the remaining home on lot 4 wasn’t funded when lots 2 and 3 were completed.  Again, in my estimation the prized lot at this point must be seen through to completion in order for us to be successful with the project and for Pacific Continental Bank to be successful in collecting their return of construction funds.

                                                                                                                                                                       Page 6

THE FINAL BUILD

It was now July 2007 and both homes were completed. At this point, I contacted Adair Financial again to let them know both homes had passed their final inspections. Within a short time frame, Adair Financial instructed us to go over to their sister company Adair Homes and sign the building contract for the remaining home. We went over and picked out the carpet colors and countertop finishes, along with the cabinet types that we wanted for the home. We also put down the required commitment payment of $1400 (which was non-refundable) just the same as we had done on the other three homes.

THE BACK-OUT

During the next few days, we were told by Adair Financial that Pacific Continental Bank wanted to do an appraisal to determine the value of the fourth home prior to its construction. This is what was done on the other two homes as well, and is generally appraised from the standpoint the home is already completed. We figured that it wouldn’t matter if the appraisal came in a little lower since some of the debt from lots 2 and 3 were going to be spread over to lot 4 to level the balances out somewhat. We had previously been told that when Pacific Continental Bank did the pre-build appraisals on lots 2 and 3, they each came in at $305,000 about a year earlier. Even though we were not allowed to see thoseappraisals, Adair Financial had relayed those amounts to us previously. I received a phone call within a week or so from Adair Financial telling me that they had shocking and very bad news. The appraisal “only” came in at $275,000 and the bank was unwilling to finance the final build. This shouldn’t have made any difference because this would have only required a minimum of $15,000 to be taken from each of lots 2 and 3 and brought over to the final build in order to spread the balances.  In fact, much more than that amount would have been able to be brought over as previously discussed in order to even-out all three balances. It didn’t make sense that it actually penciled out to where they could take $50k or $60k combined from lots 2 and 3 and spread that debt over to lot 4, but yet they couldn’t take the lower $15,000 amount.

Adair Financial was upset and frustrated as well from what I could tell because they had invested four years of their time in helping us along this journey, and with Pacific Continental Bank backing out they had no alternative options for us. We were stunned and asked for a copy of the appraisal so we could see it with our own eyes. Since the appraisal was actually ordered by Adair Financial instead of Pacific Continental Bank, they went ahead and gave us a copy. Now the mess we were in because of Pacific Continental Bank backing out was extremely bad...There were two issues in this conundrum: The first issue was that the loan-to-value ratios were too high on lots 2 and 3 for anyone to loan money to pay back Pacific Continental Bank, especially with private lenders. The second issue was that with the balance Pacific Continental Bank left us with, we couldn’t sell the properties because it wouldn’t pay them off while covering a Realtor’s standard 6% fee and the bank was now demanding their money. 

                                                                                                                                                                 

                                                                                                                                                                     Page 7

 If we tried to sell them ourselves to save the 6%, it would take longer and if those didn’t sell within 30 days at the necessary price, interest would accrue rapidly each month thereafter making it all the more impossible to sell. Other than our primary residence, the other homes were meant to be investment properties in the form of rentals to hold long-term, so it wouldn’t make sense for us whatsoever to turn around and list them for zero or negative profit especially since we put tenants in them right away.

THE CIVIL ATTORNEY

We then retained an attorney. Once we gave him all the details, he told us we could either file a legal complaint or he could write a letter to Pacific Continental Bank telling them to either work with us or face a lawsuit. When the lawyer received correspondence back from the bank’s attorney, it was relayed to us that the bank was willing to “work” with us if we came up to their corporate office in Eugene, OR to meet with them and could show them an exit strategy to a workout. We realized that a legal battle could be costly for us and we couldn’t afford to replenish our retainer. But conversely, we didn’t feel there was a remedy for what they did to us and we also knew that any workout might only be kicking the can down the road. We didn’t put countless hundreds of hours into this project only to lose the properties... The only logical decision at this time was to meet with the bank.

MEET YOUR LOAN MAKER

Within a relatively short time, a meeting was arranged and we drove up to Eugene where the bank’s corporate office was located. While we were there, we met with a couple of the bank’s officers. They asked us if we had come up with an exit strategy. We told them that we had a proposal and that we didn’t put all this effort into the project only to lose the homes.  They asked us why we would want to keep them since we owed more money than they were worth. Before looking at our response to them, it’s important you keep in mind the market hadn’t crashed yet and the only reason we owed more than they were worth is solely because they didn’t do the last build. Remember our prized lot? In doing the last build, they would have spread some of the debt from lots 2 and 3 over to the final lot, and evened out the balances on all three of them. The day that the construction loan on lot 4 would have been funded, the loan-to-value ratios would have instantly been low enough for us to pursue loans to pay off lots 2 and 3. Once lot 4 would have been finished, we would have then pursued paying off that final construction loan with a permanent loan. It’s the same concept they did when they brought the infrastructure balance over and divided it up between lots 2 and 3. It needs to be pointed out here that for them to use the appraisal coming in at $275,000 (instead of $305,000) as an excuse to not build, doesn’t make any sense because even after spreading debt from  lots 2 and 3, it should have still had enough equity to obtain a loan to pay them off. Finally, we reiterated to the bank’s officers that we had planned to hold the homes for several years and that it was our eventual retirement.  The meeting was over rather quickly and over the course of a week or so, some terms were e-mailed back and forth and finally agreed upon. As previously mentioned, it did merely kick the can down the road because we knew the only true solution was for them to fund lot 4.

                                                                                                                                                                   

                                                                                                                                                                      Page 8

THE WORKOUT

The agreement was to pay interest-only over the course of three years and then refinance out and get Pacific Continental Bank paid off. The payments were huge though and the rents from the properties didn’t cover the payments. While we wouldn’t be paying down principal at all, the plan was only hinged on the hope the real estate market was going to go up and we would refinance out. As it was, in December of 2007 we took out a short-term interest-only loan against our free and clear prized lot through a private lender. This was because we needed to consolidate our high-interest credit cards which had been used for finishing up the project due to the previously mentioned water drainage issue. We had been robbing Peter to pay Paul so to speak with relation to credit cards and it was crucial in order to keep our credit stellar while we hunted for a solution to pay off the bank. 

 

A FAILED PLAN

Though the homes were now rented out, we kept struggling to make payments through 2009 at which point, we just couldn’t come up with the additional cash each month.  Aside from that, had the fourth house been done, this “workout” wouldn’t even exist and the bank would have likely been paid off. The crash in 2008 certainly made matters worse in that the value of the homes went down by around 40% and it would essentially prevent us from refinancing out even if we had made all payments through the three- year workout as agreed. Had the bank done the fourth house in 2007 and on course, the final home would have been done around May of 2008, several months before the official crash of 2008. We asked the bank if they would modify the workout to make the payments more affordable, especially now that they were worth even less than when they were completed. They refused to modify the workout.

 

THE AUCTIONEER

The bank then hired a consultant who is an auctioneer and real estate appraiser out of Eugene, OR. (Voorhees & Associates is the company) The consultant, Sid, contacted me and asked if we could meet for lunch. I accepted the invitation and he bought me lunch where we discussed my current venture in relation to the bank. He asked me if we would consider signing over the deeds to the bank, in lieu of a foreclosure. I told him that we really didn’t want to do that as it wasn’t just about the money but more than that, it was the time invested into the project. I explained that we could sit on the houses for twenty or even thirty years if need be, we just wanted to retain ownership so we could sell them when we went to retire down the road.

 

 

                                                                                                                                                                       Page 9

THE WELL

We received a warning letter not long after that meeting stating that the bank would be filing foreclosure on both of the homes and additionally that we could be liable for a deficiency judgment on both of them since the homes would undoubtedly sell for less than what was owed. At this point we really began considering giving them back to the bank with a deed in lieu of foreclosure, although they told us that they hadn’t decided if it would be a judicial or non-judicial foreclosure but they had the right to do a non-judicial foreclosure. I called the bank and told them we were really considering it but that we had a tenant in the mobile home on lot 4 where they were supposed to build and we wanted to make sure they would allow an easement so that our tenants could continue to access the well since it was their only source of water for drinking or otherwise. Keep in mind that the mobile home would have been demolished prior to the last build on lot 4. Because the bank didn’t finance the build on the mobile home lot, there was still only well-water. The bank told me that if we signed over the deed, they would not grant the well water easement. If we deeded the properties over to the bank without the easement, it would make it to where the tenants on that lot would have to either move out or we would have to hire a contractor to hook the mobile home up to city water.

We were financially drained at this time and could not afford to have the mobile home hooked up to city water even though the lot had been plumbed for city water when we did the infrastructure. If we wanted to retain our tenants, then we legally and especially ethically had to keep water available to them.  So because of the water situation, we decided not to sign the deeds in lieu. We figured, why just hand over the homes and make it easy for them if they couldn’t grant a simple water easement? By their refusal to grant an easement to the well they were implying that they would rather do a costly foreclosure on two properties, or at least that’s how we saw it.

 

FORECLOSURE NOTICE

Not long after the phone conversation with Pacific Continental Bank, we received papers in the mail stating the bank was now filing for foreclosure. At some point not too long after that, we were given a planned auction date as well. On May 18th 2010 I bought two shares of their stock (ticker PCBK). I knew that as an (albeit small) investor, they had to send me information every time they sent anything to their shareholders and I wanted to keep tabs on them.

 

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THE BK-13

I had done a little research on the possibilities of avoiding a foreclosure sale and happened to discover that we could quite possibly file a chapter 13 bankruptcy and still retain our assets. A chapter 13 is different than a chapter 7 in that you are typically able to keep many of your assets including real estate. In a chapter 7, most everything except an extreme bare minimum of essentials is stripped away from the debtor and sold to help satisfy some of the debt while simultaneously alleviating the debtor of the burden of debt. To qualify for a chapter 7, one must qualify through what is called a means test. Based on the means test, we didn’t qualify for a chapter 7 because of the real estate which we owned and especially from the rental income which we were receiving. The only way we could qualify was through a 13. Once a 13 is filed there is an automatic stay put in place to where the bank cannot continue with a foreclosure. Additionally a bankruptcy plan had to be drafted and agreed upon by all parties. We filed this in November of 2010 through attorney Tom Dzieman (pronounced Deez’ man) in Medford, OR.  Interestingly enough just a month prior, The general manager we had dealt with originally at Adair Financial Services, Scott Madsen, was sentenced to 24 months in prison on October 4th 2010 for stealing company funds.*  Adair Financial Services actually now operates as Alliance Financial Services, LLC.  

  

FINDING MARKET VALUE

One of things required for the bankruptcy plan was to establish the current market values of the properties. Our bankruptcy attorney wanted to use the county assessed value estimates at the time which were $148,220 and $151,890 because according to realtors we had spoken with those assessed values were closer to the real market values at the time. However the bank and their attorney insisted that the real market value was $165,000 per property based on information given to them and they would not move from that figure.

 

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THE EXIT DILEMMA

An agreed bankruptcy plan was put in place after several months and was accepted by all parties. Theoretically we should have been able to make payments over five years and then refinance out, (similar to the initial workout) only, this time we had five years for the market to go up, and also actual principal would be applied to the balances this time around. However, the bankruptcy plan had an exit strategy problem... There was wording in the plan which gave us a colossal disadvantage. It stated  ...”Should the real market value of the property increase by 20% by the 55th month of the plan, Pacific Continental Bank shall be entitled to receive ½ of the increased value, to be included in the payoff amount.”  There was a serious problem with this wording however... Let me elaborate...We knew we would need every bit of appreciation in the homes by the end of the five years to qualify for new loans. These were investment properties and we had some time to obtain financing and also had the option of going through private lenders as well as conventional lenders. Private lenders generally only lend with a 65% loan-to-value ratio on investment properties though. On an investment property which is valued at $100,000 for example, means they won’t refinance or lend on the property if you owe more than $65,000 unless you come up with funds to pay down the difference. So if one of our home’s real market value went up to $200,000 towards the end of the five years, then to obtain a private loan, the properties couldn’t have a balance larger than $130,000. Make sense? (It needs to be noted that around the 4 ½-year mark, we owed roughly $144,000 on each lots 2 and 3.) So with a new basis (under the bankruptcy) of $165,000, a 20% increase would mean that the homes couldn’t exceed $198,000 in value at the time of payoff or we would have to split half of the increase above the $165,000 mark with the bank.

Let’s take that $200,000 real market value for a moment... this means the bank would get half of everything above $165,000. So, if you subtract $165,000 from $200,000, you have $35,000. The bank’s half in that scenario would be $17,500. Since the only way to pay off Pacific Continental Bank would be to refinance, any new lender would have to be willing to give Pacific Continental Bank their half of the 20% increase at the time of payoff, thereby increasing the loan-to- value ratio (LTV) for the private lender, and simultaneously disqualifying us from getting the loan. This is because now instead of the payoff being $144,000, after you add in the additional $17,500 that the bank receives, the balances would be near where they were at the beginning of the bankruptcy, now bringing that balance back up to $161,500 under this $200,000 scenario. Also with those numbers and without the wording in the plan, we would still be short $14,000 per house in order to qualify for private money but even more so with the wording in the plan. With the wording in the plan under that scenario we would be short $31,500 per house in order to qualify for private money. In order for the plan to work with the special wording and for a 65% LTV, the homes would have to increase from $165k in 2010 to roughly $425k by 2015.

 

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This is how this scenario would look:

Basis                                                                                                       New value in five years

                  $165,000                                                                                                 $425,000

(A 20% increase from the basis is needed for the bank to get ½, which in this case is the $198,000 mark)

$425,000 value

-$165,000 basis

                                           = $260,000 (profit/appreciation) increase

                                           Bank’s entitlement = $130,000 (½ of increase)

Rough Balance at the 4½-year mark

$144,000

Where does the bank obtain their qualifying $130,000 profit in addition to the $144,000 balance owed? (Remember this is supposed to be a refinance)

$144,000 balance

                               +130,000 bank’s qualifying amount

                                                                              =274,000 owed to bank

(Note that this amount doesn’t exceed $276,250 which is 65% of $425,000)

(That’s actually somewhat near what we owed before the bankruptcy for each house...)

This means the money to pay the bank “½ of the increased value” would have to come from the new lender and nowhere else. Keep in mind the increased value would be from the basis not the balance. OK, I’m sure the new (private) lender won’t mind so long as that $274,000 that we now have to pay the bank is no more than 65% of the real market value, and lo and behold in this case, it wouldn’t be, which is good! So what’s the problem? Well this would require the value jumping essentially 258% in value in five years or just under  21% annualized without fail, (slightly far-fetched for the way it’s worded) to actually work at a 65% loan-to-value ratio. Another way stated: virtually impossible! Without any mumbo  jumbo wording we would only owe the $144,000 balance to the bank but the way it’s worded, they get paid on the increase in value above the $165,000 bankruptcy basis.

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If you try the same formula at a real market value of $400,000, the formula doesn’t work to qualify. The threshold for the 65% loan-to-value to work is actually exactly $410,000 however that amount wouldn’t allow for closing costs so that is why I used $425,000 in the example. Subsequently if you keep trying the formula at lower and lower numbers it’s still not going to work. Seeing as the $425,000 would require a virtually impossible growth rate, it’s safe to say that any figures higher than $425,000 are all the more impossible to attain in terms of price appreciation. That kind of growth rate is purely mythical.                                                                                                                                                                         

If we come back from the above unrealistic five-year appreciation and refigure the home’s real market value to be just under $198,000, say $197,000 for example, then we wouldn’t have to split any increase. But then there also wouldn’t be enough equity to qualify for the private lender’s 65% LTV. So on one hand, we wanted the value to go high enough to qualify but not too high to disqualify because of the wording. Had the initial basis for each home through the courts been lowered down to even just $125,000 under the plan, it still would not have worked with a private lender at their typical 65% LTV. In a $125,000 basis-scenario with the home still hypothetically appreciating to our original $200,000, the increase would have been $75,000. Using 20% again as the threshold for the bank to qualify for their half, it would have to appreciate to only $150,000. Here, the bank would get $37,500. ($200,000 less $125,000 = $75,000, divided by two) Assuming we paid in the same amount to principal under the plan it would be safe to assume that by the 4 ½ year mark the balance would be around $104,000. Add $37,500 to $104,000 and you get $141,500; still too much risk for the private investor because 65% of $200,000 is $130,000 and not to be exceeded to qualify.

To be fair, in either scenario above, if you were to use an 85% loan to value, it would actually work to give the bank their increased portion. However the problem is that to get a lender to do 85% loan to value, they would assuredly need to be a conventional lender and even at that, most conventional lenders will only do a 75% to 80% LTV on investment properties. That small percentage change can amount to a difference of several thousand dollars to a lender’s security. To our surprise, we were able to find some conventional lenders who could have done the loans except for one factor:  Federal guidelines related specifically to bankruptcy borrowers! Private lenders don’t have to abide by the federal guidelines and technically neither do conventional lenders either but considering the amount of scrutiny in lending since the market crash of ’08, many conventional lenders are, as we’ve found out, choosing to follow those guidelines. I can only assume this is so they cannot be called out by the federal government for not following them. We were told in writing by U.S. Bank that their federal (bankruptcy) guidelines are as follows:  “24 months must have passed since the discharge date and the application date; 48 months must have passed since the dismissal date and the application date.” Bank of the Cascades told us in writing that based on Fannie Mae guidelines which they abide by  ”Bankruptcies need to be discharged 4 years for a conventional refinance, they will look at 2yrs discharged with very extenuating circumstances.“  

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Seeing as no conventional lender was able to help us due to either of those guidelines, I decided to try and find out how long these guidelines had been around to see if Pacific Continental Bank and their attorney should have reasonably known that we wouldn’t be able to refinance out of the bankruptcy when the terminology was first drafted to their requirement.  I called Bank of the Cascades on the phone to try and find out.  I was told by their vice president (who was the southern Oregon area manager) that those Fannie Mae guidelines have been around since well before 2009, which means they were in place before we ever filed for bankruptcy. U.S. Bank told us in writing that they use Freddie Mac guidelines and that “US Bank underwrites to and follows Freddie Mac guidelines. Freddie Mac guideline memo released on October 15, 2010 indicates the current guidelines were put into effect for mortgages with settlement dates on or after February 1, 2011”.                                                                                                                                                                        

This means the Fannie Mae guideline was in place at least a year before we filed for bankruptcy and the Freddie Mac guideline was in place before our case plan was confirmed in March of 2011. A bankruptcy plan can take several months to be confirmed after it’s filed. In this case, both the Fannie Mae and Freddie Mac federal guidelines were in place prior to confirmation of the plan. There were also a couple banks that thought they could do an FHA loan for us except that the FHA guideline requires the home to be owner-occupied only, and would only finance one home, not both. One of them pointed out that even if we were willing to move into one of the homes, that it would likely be a tough sell to convince FHA that we would actually move in (next door) and to get HUD to insure the loan. All in all, this means that Pacific Continental Bank, their attorney at Farleigh Wada Witt, and even the trustee and trustee’s  attorney would have or rather, should have, reasonably known that we would be unable to refinance out of both homes with a conventional lender; which remember, are subject to the more stringent Fannie Mae and Freddie Mac guidelines. Farleigh Wada Witt’s website is what leads me to this conclusion since they state they are experts in banking, finance and real Estate law. They list the following on their website as part of their legal services:

 

Banking & Finance

Bankruptcy & Creditors’ Rights

Business

Employment

Estate Planning & Administration

Litigation & Dispute Resolution

Real Estate

 

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We believe that is why the bank and their attorney insisted on a 20%-increase clause; in order that we couldn’t get private money to use to finance with. Now our original proposed bankruptcy plan did not call for that strange wording and the bank’s attorney at Farleigh Wada Witt stated in writing to me on January 19th 2017 that “Your attorney drafted the amended plan. The provision was negotiated directly with him.”  So while true Tom Dzieman actually drafted the original amended plan, Tom Dzieman had told us at the time of drafting that it was the only plan the bank would agree to at all or there would be no plan and the case would likely be dismissed. We signed the amended plan hoping to find a way out. It’s very important to remember though that the failure of the project was not us signing the amended plan but rather, the fact that the bank refused to finance the final lot. The motive we believed? Simple: In doing so, they could collect over $100,000 from us over the course of the five-year bankruptcy and still ultimately get the houses back, and then turn around and sell them for far more than what our payoff would have been under a sale or refinance approved by the bankruptcy court. To be clear, we’re not saying this was the bank’s motive in not finishing the final lot because the bank wouldn’t have known we’d file for bankruptcy (versus simply handing them back over after evaluating the bank’s hired advisor’s words over lunch at Olive Garden.) What we are saying is that once we filed for bankruptcy, we feel they saw opportunity to take further advantage with the increased-value clause. If that sounds far-fetched, keep reading because as you will see, that is exactly what happened.                                                                                                                                                             

 

 

THE DOUBLE-RETIREMENT

Most chapter 13 bankruptcies are limited to five years during which time payments are made to the trustee. To complicate matters for us though, both the chapter 13 trustee and our original bankruptcy attorney, Tom Dzieman, retired around the 4-year mark into our filing and at almost the same time. Even though a new trustee was assigned to the case and even though our first attorney referred the case to Olsen Daines (another law firm who was willing to take over the case as a courtesy), it inflated our anxiety because now we had new people involved who didn’t know the already-complicated circumstances surrounding the exit dilemma who would need to bring themselves up to speed on our case. The bankruptcy itself overall went fairly smooth for the first four years up until about the final year when the new firm discovered some things about our case which we were unaware of.

 

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THE LISTING

When it became clear to us that we weren’t going to be able to get loans on the properties to pay off the bank, we decided to sell the properties as a last resort. We figured we could at least sell them and make a miniscule amount of profit in order to have something to show for the fruits of our labor in this whole nightmare. At this point getting a discharge from bankruptcy was the most important thing: Even more important than keeping the houses because of our constrained timeframe. If we were to make payments for five years and not be granted a discharge, the bank could come back on us later and still make us liable for the homes. We only had two options for our bankruptcy, a discharge or a dismissal. A discharge would mean we would have successfully completed all our plan payments and no longer owe our creditors. A dismissal would generally mean that we failed to make our plan payments and we would once again owe all original debt to the creditors.                                                                                                                                                                           

We were not about to have more wasted years under our belt so we just focused on liquidating the homes to satisfy the debt at this point. We had tenants in the homes which we had used to fund the plan payments but when we listed the homes on lots 2 and 3, one of the tenants moved out, making it impossible to cover the trustee payment. Upon moving out, the tenants stated they had felt somewhat violated and regarded each and every real estate showing an invasion of privacy.  We could totally empathize with them and we felt terrible for putting them in limbo. They didn’t like not knowing how much longer they would get to stay in the home so that’s what made them decide to leave.  After we lost that rental income, we were then advised under legal counsel to make smaller payments because we could make up the difference owed at the closing of escrow if the homes sold or we could obtain a modified pay plan if they didn’t sell.                                                                                                                                                                          

THE OFFER

In July of 2015 we received an offer on one of the homes. The sale had to be “noticed” and we had to wait for the judge to approve the sale. The buyer was made aware that this had to have court approval but was willing to wait for the approval. When the buyer’s deadline for our court approval to sell wasn’t met, he extended out another deadline in the hopes of still purchasing the property. After nearly 30 days of waiting, information trickled through to us that because there was no provision in the plan to allow for the sale of the homes, we wouldn’t be allowed to sell it. This ended up completely wasting the buyer’s time not to mention his real estate agent and our agent as well. This seemingly foolish detail or lack thereof with regard to the plan made it to where we were now unable to pay the bank off for the one home when we had a qualified buyer with a bonafide offer, no less. This was very frustrating since not only could we not previously get a loan to pay the bank off, but now when we find a way to pay them off (at least for one of the properties)  it’s deemed to be “not the right way.” The offer we received would have paid the bank off for the remaining balance under the plan for that particular property.

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BEST $1,000 EVER SPENT

Since we now couldn’t refinance the homes due to stringent federal guidelines which were in effect previous to our confirmed plan (coupled with loan-to-value ratios which were too high) and since we were not even allowed to sell the homes to pay off the bank, we had to file a motion for a modified plan to allow for the surrender of the properties. We also really needed this modified plan in order to allow for the reduced trustee payments we’d been making due to the empty house. This was especially true now since the lack of a tenant put us behind with the trustee. Because the house had been for sale for several months, we were out nearly $10,000 which would have kept our plan payments current. Olsen Daines, the firm which now represented us had initially only agreed to take over our case as a courtesy to our previous (retired) attorney. However, since the major monkey-wrench of not being able to sell the homes reared its hideous head, and since we were now in jeopardy of our case being dismissed for delinquent payments (albeit under legal counsel due to changed circumstances) they would inarguably need some sort of compensation for their time involved in this complicated matter. Our attorney told us that this would be the best $1,000 ever spent and would it prove to be so true.                                                                                                                                                                     

THE ULTIMATUM

The way a modified plan works is, the proposed plan has to be sent to all creditors to give them a chance to object. In this case there was Pacific Continental for lots 2 and 3, the private lender to lot 4, our second lienholder on our primary residence and a credit card company related to overages on the infrastructure project. The creditors have 21 days to object to anything in the proposed modified plan. Because of time constraints, should any of the creditors object, the case would be automatically dismissed.  If the case was dismissed, we would then again be liable for the entire subdivision project. There was a major problem that had to be addressed though... It was discovered back in July 2015 that we had to come up with an additional large sum of cash known as the “best interest of creditors.”  In the confirmed plan which we were given, the amount shown in our copy for the best interest of creditors was “N/A” which translates to zero. So when we found out in the eleventh hour that the court’s copy somehow showed $5500, we were in dismay.

Had we been given a true copy, we could have budgeted for it over the five years. To prove to myself that I was correct in this matter and to see if ours matched what the creditors were given, I called Amerititle, the loan servicer for the lienholder on lot 4. The gal I spoke with there, Carol, stated that the only copy ever sent to them also showed “N/A” as well. I asked her if she could e-mail me a copy and she gladly sent it over. At this point, our attorney advised us that regardless of the fact that we were never made aware of the additional $5500, it still had to be paid in order for us to receive a discharge. The big concern here was that we may not be able to come up with the money to pay the best-interest figure. More of an issue however was that if we were surrendering the properties to the bank but were to still receive a dismissal instead of a discharge, then once the bank sold the properties, they could still sue us for a deficiency judgement.  We had to have the assurance that if we were going to surrender them, we couldn’t be sued later if by some chance we were to receive a dismissal.

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Our attorney received a list of changes from Pacific Continental Bank’s attorney stating that they wouldn’t object to our modified plan as long as we agreed to their terms in surrendering the properties. In turn, if we agreed to certain requirements, they would agree to waive a deficiency judgement in the event we got our case dismissed rather than discharged. Fortunately, none of the other creditors responded during the required waiting period. Listed in writing were six items which we agreed to in exchange for the bank not objecting to our modified plan and thereby waiving any deficiency judgement in the event we subsequently received a dismissal rather than a discharge:                                                                                                                                                       

                                                                                                                                                                        

  • We had to provide a personal financial statement.

  • We had to provide the signed deeds in lieu for each property. In doing so they agreed to not record the deeds until after our discharge, assuming we received one.

  • We had to agree that they would not record an easement for the well (even though we still had tenants on the adjacent lot)

  • We must provide termination of leases to the tenants in lots 2 and 3 immediately and provide copies to the bank. Their demands were given to us November 9th which means they didn’t care that it would put the tenants out of their homes two weeks before Christmas.

  • “...each property shall be cleaned and left in broom-swept condition without damage or material waste to the properties. “

  • The bank reserved the right to foreclose on the properties even after the deeds are recorded if any liens were found to be Junior to the bank’s interest.

Unfortunately, the bank had us in a corner. We saw it as:  “Agree to our terms or else...”  We found the fifth demand to be quite insulting because they caused this entire problem from the beginning and now we’re losing the homes and yet are being required to clean them.  The homes didn’t have to be detailed, but we still had to get all of the tenants’ garbage out and make the homes presentable for Pacific Continental Bank... We didn’t feel like doing any favors for them and yet they could and would cause major trouble for us in the form of a deficiency judgment if we didn’t do exactly what they wanted. So, the way we saw it and the way it made us feel was as if we were being forced to agree to this. An excerpt from the deed in lieu form stated “...and is not acting under misapprehensions as to the effect of this Deed, nor under any duress, undue influence or misrepresentations.” We felt it to be somewhat of a joke  about the duress wording because though we weren’t threatened physically and while true, we offered to surrender the properties in our modified plan, the only alternative was to sign the deeds over to them or get our case dismissed and thereby still be required to repay all of the money back. Keep in mind, this would be all original debt which would once again be owed, and this would be even after they collected over $100,000 from us through the course of the bankruptcy. So it wasn’t under duress but it didn’t feel exactly uncoerced either.

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THE MODIFIED PLAN

In October 2015, the judge approved our modified plan and allowed for the surrender of the properties as well as allowing the lower plan payments until our discharge. This surrender included handing back over the prized lot to the private lender who was the lienholder on lot 4 as well because we were unable to get other private money to pay it off in time. A realtor who had shown one of the homes a few months prior called me stating that one of his previous clients, whom he had shown these same homes to during the summer, was needing an extremely short-term place to stay and asked if the homes were available for rent. He noticed we had pulled them back off the market (due to the sale of the homes being disallowed under the plan.)  I was able to make arrangements for his former client to stay in the one empty home for a few months and in doing so it became our solution to help fund a portion of the best-interest-of-creditors issue.     

                                                                          

THE DISCHARGE

On March 1st 2016 we finally received our discharge. Nearly $600,000 of alleviated debt, all related to the subdivision, had been cleared. Upon the discharge we realized the whole situation could have been even worse if our case had been dismissed. We had paid in over $180,000 to the trustee over five years and over half of it was disbursed back to Pacific Continental Bank alone. It was a huge weight off of our shoulders not owing them anything any longer. While it was a huge relief to not owe them anything there was this simultaneous sickening feeling as well, because not only did we have nothing to show for it, but we lost the majority of our property in the process and it just blew our minds to look back and see how many years were gone without having anything to show for it. Our residence sits at the end of the street and coming and going, we pass by these other lots and are reminded daily of how our land was essentially taken from us without a fair shot; the homes representative of some seemingly immovable, dangling carrots placed in front of us, just out of reach. If we had our choice, we would have really liked to have seen a modified plan where Pacific Continental Bank agreed to allow us to keep the properties for two to three additional years after the discharge. This would have at least given us a chance to qualify for those federal bankruptcy guidelines; however the bank simply wanted to sell the properties and have since sold them.

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There’s no other way to put it other than we felt like we were played by the bank and potentially scammed. We could have kept the properties rented out and continued to make the payments for another two or three years. After all, we did it for five years successfully under the plan. Rents were skyrocketing and we could have charged even more than we’d been charging. Unfortunately for us, toward the end, the bank indicated that they simply wanted the homes back and due to extreme time constraints it had become more important for us to focus on just receiving the discharge. At this point, even if they had worked out some sort of arrangement for us to keep them for two to three more years, we were told that it would have been at the original amount owed prior to the bankruptcy (even though they just received over $100,000 from us.) Why would we pay them $280,000 per house now, when under the plan we only owed roughly half that amount? Had we received a dismissal instead of a discharge we could have refiled again right away, but when re-filing a chapter 13 in under a year from a dismissal, we wouldn’t have any legal protection from the automatic stay which means nothing could stop the homes from being foreclosed on. The bank made it clear that if we were to receive a dismissal and refile again, they would file a motion to have the re-filed case dismissed, giving us an even tougher leg to stand on.

                                                                                                                                           

RETROSPECT

In retrospect, we wonder why the bank ever let us get to that phase of the project only to strand us...After all, they claim to be “The Right Bank.”  Their website states: “As The Right Bank, we take business banking to a higher level. We’re more than a bank; we are passionate advocates for businesses, communities and people.”  Sadly, they have proven in more ways than one that they have definitely been “The Wrong Bank” for us. In crystal-clear hindsight, we ought to have pressed them to finance the fourth house instead of any so-called workout because no workout of any kind remedied the fact they didn’t follow through. Had we known the bank would desert us, we never would have done this project. We could have kept both our primary dwelling and the mobile home on the same tax lot, with rent coming in from the mobile home thereby offsetting our house payment. We would have been far better off and held actual equity in our home but even now we are still upside-down in valuation. Every payment we make on our (now larger balance) mortgage each month is tied to wasted time and energy.

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Had they done all three homes at once, they would have all appraised for the $305,000 because all of the homes were the same square footage, on virtually the exact same lot size, in the same neighborhood and built by the same builder. It would have eliminated completely the possibility of the fourth home’s (lower) appraisal ever coming into play. We can’t stress enough how much time we’ve completely squandered with the way things turned out.  Between putting in the infrastructure, the owner-shared responsibilities with the builder, and all the time put into managing the properties over the years, it has essentially become free property management for Pacific Continental Bank (Soon to possibly be Columbia Bank.)  We handled collecting rents, performed occasional maintenance, cleaned the homes when tenants moved out and also had to do several evictions over the years, as well as paying property taxes to the best of our abilities, all while not knowing if we’d make it out of this situation with all the amount of effort we’d put in.  

Even though Adair Financial was the broker in all of this, Pacific Continental Bank being the financial backer they were, never once pointed us in the direction of another lender who they thought might help us   -Never before the project, never after having backed out the project and never during our bankruptcy. Maybe they never referred us because they were too embarrassed that we would have to explain what happened, which would make it ironic; them being the referring lender... It’s really difficult to say why they never referred us to another lender, which would have been at least a gesture, but to never have even suggested anything other than the suggestion of handing the homes back is beyond pathetic. They certainly know other lenders and the way we see it is, this has been far more than just about money, it’s been about time. Our son was seven years old when this all started and he is now twenty. Let that sink in for a moment: Thirteen years including this one-year post-bankruptcy waiting period. He has indicated a lot of past resentment towards us over the time this project has taken away from our family and we as parents are to blame for him feeling that way, but even more so now, to have done this for nothing and to have nothing to show for it...It’s an even bigger insult to him. We can’t get that time back.

 

*Source:  FBI https://archives.fbi.gov/archives/portland/press-releases/2010/pd100410.htm 

Again, if you are considering filing bankruptcy in Oregon, we strongly recommend Matthew Casper of Olsen Daines at (541) 770-5731.

We sincerely wish to thank RipoffReport.com for allowing us to publish our story. Thank you so much!

This report was posted on Ripoff Report on 03/29/2017 02:11 PM and is a permanent record located here: https://www.ripoffreport.com/reports/pacific-continental-bank/eugene-oregon-97401-2622/pacific-continental-bank-aka-columbia-bank-did-not-finish-job-through-to-completion-eugen-1364774. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year. Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report. READ: Foreign websites steal our content

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