Affordable housing group appears defunct amid foreclosure judgment
Posted on Thursday, March 27, 2008
URL: http://www.nwanews.com/nwat/News/63537/
A default judgment in foreclosure has been issued against a nonprofit corporation that was supposed to revitalize south Fayetteville and bring affordable housing to the neighborhood.
Some of the property in the foreclosure was purchased by the city of Fayetteville using Community Development Block Grant funds.
Judgment in the amount of $ 123, 411 was entered Monday against South Fayetteville Community Development Corp. in Washington County Circuit Court by Judge Gary L. Carson.
The Fayetteville Community Development Block Grant program, which held a lien on one of the properties in the lawsuit, was also a defendant in the action initiated by the Bank of Fayetteville.
“ We haven’t been able to communicate with (the nonprofit ) for a while, ” said Yolanda Fields, community resources director for the city. Fields manages the block grant program for the city.
She said many attempts to reach Manuel Jones, director of the South Fayetteville Community Development Corp., by certified mail have gone unclaimed. Attempts to reach Jones by phone have also been unsuccessful, she said.
Block grant funds were used to buy a lot at the corner of Washington Avenue and Sixth Street.
“ We acquired this lot to provide it to them to build homes, ” Fields explained.
She said the city purchased the lot in 2001. Title was transferred to the corporation in an agreement by which the nonprofit was supposed to build affordable homes. That lot, since approved for a lot split into two lots, was mortgaged by the corporation to the Bank of Fayetteville in 2006.
“ We provided the funds in good faith, ” Fields said. “ They did sign an agreement with us that that lot was to be used for affordable housing. ”
No homes were built on either lot at that corner.
After Fields saw a for sale sign on one of the lots, a lien was placed on the property.
Mark Henry, an attorney for the Henry Law Firm of Fayetteville, represented the bank in the action. He said the bank extended loans to the corporation on six parcels of property and that the corporation stopped making payments on those properties.
Henry said Wednesday that Jones filed an answer and showed up in court.
According to the default judgment, because Jones is not an attorney his answer was stricken.
Henry said Jones did not dispute that the loans were in default and did not request additional time.
In July, Jones said he hoped the corporation would start five more homes — three in Fayetteville and two in Lincoln — before the end of the year.
The foreclosure action was for six mortgages on five parcels of land — three in Fayetteville and two in Lincoln.
The corporation has 10 days from judgment to pay the $ 123, 000 or the properties will be sold at public auction at the door of the Washington County Courthouse, per the judgment ruling.
“ It’s not a hotly contested thing, ” Henry said. “ This is the process you have to go through when someone doesn’t pay to be able to get clear title to the property. ”
According to the default judgment, the corporation will be liable for any deficiency on the judgment due to the bank after the foreclosure sale.
The South Fayetteville Community Development Corp. was created in 1999 to revitalize the city’s south side. Twelve Fayetteville residents on the board of directors had high ideals and high expectations for the nonprofit corporation.
They wanted to rebuild neighborhood roots, create a positive change, and play a significant role in building and maintaining Fayetteville heritage.
Board members hoped to promote economic reinvestment in the neighborhood, enable residents to own their own homes and encourage quality, affordable child care.
They also wanted to enhance youth recreation and education, promote safe and inter-generational activities for the elderly in the area, and reduce vandalism.
Fields said the corporation had contracted with the city to build four affordable houses. Two were built.
Those two have since been resold. Because they were sold to individuals who did not meet low- or moderate-income guidelines, the city was reimbursed for the balance of forgivable liens against the properties.
Jones listed several reasons in the 2007 interview for not getting homes built, including the strong housing market in Fayetteville, changes in bank personnel, lack of knowledge by the banking industry about affordable housing, multiple-source financing and difficult negotiations with landowners.
The last contact between the city and corporation was when Path Walker of Fayetteville, who was then identified as president of the organization, signed a buildable lot agreement in July that was dated January 2007.
Fields said the city does not have a current list of board members for the corporation.
“ I don’t think they exist anymore, ” she said.
The South Fayetteville Community Development Corp. is in good standing, according to the Arkansas Secretary of State’s Web Site. Good standing means the articles of incorporation have been properly filed to do business, all taxes and fees due at this time have been paid, and articles of dissolution have not been filed.
Attempts to reach Jones on Wednesday were unsuccessful. Two numbers were disconnected; a third went to another person who offered one of the disconnected numbers as an option.
The corporation’s former bookkeeper, Linda Doede, said she didn’t know if the corporation still existed and that she is not involved with it.