RESEDA : Condo Owners Vote Against Rebuilding

Members of the Sherman Court Homeowners Assn. have voted not to rebuild their 132-unit condominium complex, and to offer lenders the deeds to their quake-damaged units in lieu of future mortgage payments.

The vote, taken Tuesday night, was 46 to 11, said Daniel J. Perwich, an attorney representing the homeowners group. The group needed 75% of its dues-paying members present for a valid vote, he said. Since the earthquake, some of the association members have not made dues payments.

Meanwhile, the association will continue to pursue a lawsuit against a construction company whose alleged substandard work failed during the Jan. 17 Northridge earthquake, Perwich said.

“They want to rebuild at some point,” but it may not be this group of homeowners,” Perwich said. “This is in excess of a $10-million asset, with a couple of million in problems.”

Terry Hodel, president of North American Mortgage Co., in Santa Rosa, said his company last week obtained a court injunction to prevent the association from demolishing the complex and selling the land before reaching an agreement with the company.

The mortgage company holds loans on about 87 of the 132 units, which were purchased for about $100,000 each, Hodel said.

Hodel said deed offers from loan customers in good standing would probably be accepted as long as the units had not been stripped of such permanent fixtures as kitchen cabinets, doorknobs and bathroom fixtures.

The mortgage company also will write letters on behalf of homeowners explaining the deal, a move that will help preserve good credit ratings, he said.

The deeds of homeowners who defaulted on loans before the earthquake will probably not be accepted, he added.

The mortgage company will try and refurbish or sell the units back to government lenders or, in cases where government loans are not involved, sell to private real estate companies, Hodel said.

“I don’t know how long something like this will take, because we’ve never done anything like this before,” Hodel said.