Security Pacific Files Foreclosure Notice on Keating’s Home

A Los Angeles bank has begun to foreclose on the home of Charles H. Keating Jr., the financier whose scandal-ridden Lincoln Savings & Loan of Irvine has become a symbol of the crisis in the thrift industry nationwide.

A notice filed by Security Pacific National Bank said Keating’s home in the swank Phoenix suburb of Paradise Valley is scheduled to be sold at public auctioned Aug. 15. The notice was filed Wednesday with the Maricopa County recorder’s office.

During a speech Wednesday in Washington, Keating said the bank acted because he failed to make mortgage payments for four or five months.

“I’m not saying that because I’m proud of it,” Keating said.

He brought it up, he said, to counter accusations that he has hidden millions of dollars.

Keating has said he has been financially ruined by battles with the government and by its April, 1989, takeover of Lincoln, which was formerly controlled by Keating’s American Continental Corp.

Security Pacific holds a deed of trust that secures the $2.2-million first mortgage on Keating’s home, a 4,422-square-foot one-story house with four bathrooms, a three-car garage and guest quarters.

Keating could still head off the foreclosure, said Ralph Shattuck, publisher of Foreclosure Update Newsletter of Phoenix. “He can save his home by paying all the back principal, interest, penalties and foreclosure costs and fees by 5 p.m. of the business day before the sale,” Shattuck said.

The foreclosure proceedings come despite a two-year repayment agreement Keating had worked out with Security Pacific and seven other banks on June 30. The agreement, submitted in U.S. District Court in Los Angeles in December, gives Keating until June 30, 1992, to repay $5.1 million he owes the banks. Two mortgages on the home account for more than half of the debts. The banks, in turn, promised not to force Keating into bankruptcy or to start foreclosure proceedings as long as Keating made the required payments.