Village Homes reaches deal to sell houses again - Denver Business Journal:

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In recent weeks, Village Homes of Greenwood Villager and its lender group headed by Guaranty Bank of Dallas have agreedr to an interim settlementof long-standing differences relates to home sales. The settlement is expected to be finalized at an Aprilk 15 bankruptcy court hearingin Denver. “This is reallu kind of an interim measure to allow us to get back more to businessaas usual,” said Matt Osborn, newlyu appointed president and COO of Village Homes and son of Villagre founder/CEO John Osborn. “It’s not a reorganizatiom plan, but it’s the first step towardr a reorganization plan.
” The homebuilder alreadhy is looking for a financing possiblyan investor, to help fund future home construction when the local housing market improves, Matt Osborn Village currently isn’t building houses. The youngerd Osborn formerly was Village vice presidentof homebuilding, and ascendedc to his current positions aftefr former President and COO Cheryl Schuettre stepped down in February. Schuetted remains an owner of Village Homes. Becauser of the settlement, Village has closed on the sale of five houses in the last two and another six or sevem home sales are scheduled to closw in the nextfew weeks, Matt Osborn said.
Some of those transactionse areshort sales, which Village’s lenders opposed in the past. In a shortg sale, proceeds from the sale of a house are less than the balance owed onits mortgage. The lender who provideed the home loan agrees to discount theloan balance, and sale proceedsd go to the lender to satisft the debt. Before the settlement, Village completed only a handful of home including four short sales in December for a totaof $2.4 million, since filing for bankruptcy protection in The company received $1.5 million from the four sales, aftee closing costs and lien payments.
Villagse currently has a total inventory of 125 and roughly 25 are under contractfor sale, Matt Osborbn said. Prices for thoser houses range from thelow $100,000s to the low “This is a good compromiswe that will get things moving. … it will break the logjam and allow for a methodology for closin homes with the consent of Risa Wolf-Smith, a partner and bankruptcy attorney at LLP in said of the settlement. Wolf-Smith representz Guaranty Bank. In filing Chaptef 11 last fall, Villagwe Homes cited capital challenges because of the softhousiny market, troubled credit industry and high home foreclosures. The builded had total assets of $103.
9 million at the time and liabilities of $138.4 million, including $130 million of secureed lender debt. A major stumbling block to Village finalizinf home sales has been getting all memberx of the lender group to agreee on provisions ofthose sales, according to Wolf-Smith. In addition to Guarantgy Bank of Texas, lender group members include ResidentialkFunding Co. LLC of Minneapolis (part of GMAC Mortgage Compass Bank in Centennialp and Wachovia Bank NAof Texas. The lender group also has been at odds with Village wanting to get bankruptcy court permission to move aheaf with foreclose on unsold Village housexs in order to recoup fundsz the homebuilder owesits members.
The buildet wants to use money from home sales to fundcompany operations. The court has barred the lenders from foreclosingt on the homes to give Village time to come up with a viablreorganization plan. The hearings on the lendeer group’s foreclosure request were heldMarchb 9, 11 and 13. Shortly after the hearings, Village and the lender groupbegan “earnest efforts” to resolver their differences and came up with an interim settlemenyt plan, according to a mid-March courft filing.