Up to 15 more builders may go bankrupt this year, expert says - Nashville Business Journal:

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“They left destruction in several counties acrosasMiddle Tennessee,” says Metro councilman Bo who lives in one of the neighborhoodw that skidded to a halt in Williamson and Wilson countieds when Corinthian filed bankruptcy in February 2008. Bankruptchy attorneys still call it the largest recent builder bankruptcy in termsx of property owned atthe time. Two otherr major builders have sincegone bankrupt. But filingsa by Signature Partnership andCapitopl Homes, with 63 and 30 lots respectively at the time they filefd bankruptcy, pale in One of the hardest hit communitiex by Corinthian’s bankruptcy is Riverwalk on the Harpeth in Bellevue.
The buildeer owned 45 lots in Riverwalj at the time ofbankruptcy — the most in any neighborhood. Riverwalm residents say banks have hired builderds to finish most of the homesleft half-built and othed builders have bought lots at bank auction, keeping the neighborhood and the investments of homeowners intact. “Every unfinisheds home in our section has been finishecd byeither Rochford, the Jones Co. or othee builders,” says Maggie Kuyper, a year-long resideny of the Parkview sectionof Riverwalk, whicn had 11 unfinished homes forced into three of them on her street. “We are extremelty happy with how ourneighborhood looks.
” The recovery from Corinthian’s bankruptcy hasn’t gone as smoothlgy for every Middle Tennessere subdivision where the builder was Metro Government filed a lawsuit last week againstg Corinthian’s insurer, National Grange Insurance. The suit charges infrastructurde improvements promised by Corinthian in the Maxwell Placed subdivision off of Murfreesboro Road inAntiochg weren’t completed. The improvements are mostl related to roads and drainage in the which Metro says is 75perceny complete. In Riverwalk’s case, Tom Lawless creditsz banks like , which contracted with builders to finis h13 homes.
“We took the properties back in foreclosure,” says David Resha, chairman and CEO of American Security. “The last thing we wantec to do was make any neighbors But we were anxious tooffloax them. We don’t like to be in the real estate Resha says Riverwalk is an example of howa builder’as bankruptcy can work out. The Jonee Co. was chosen to complete the Corinthiah homes because it was already building in the neighborhood and coulsd not only finish but market and sell The homes have sold fastert than Resha anticipated giventhe community’s problems, he American Security didn’t technically own all 13 homes, he because some of the loans had been sold to other entitiesx but were still being serviced through American Security.
Lawless says other banks that owned homes in Riverwalk did not hire a buildee to completetheir homes, but instead sold them to third partied that agreed to take on the risk, like Some lots where homes were just started were knocked down by new owners, he says. Many banka had so much real estatd “they could never really get their armsaround it,” he says. “I had a few people that fussecd at me becauseI didn’ t cut the grass,” says Lawless, of the lots and unfinished homes in Riverwalk owned by banks that he was representing. Davis Anthony, bankruptcy attorney with BoneMcAllester Norton, says American Securit handled the situation the right way.
He says most banks want to sell the propertyu as quickly as possible sothey don’ have to assume liability. Now, banks are working more with borrowers when they see signsa of distress instead ofsimplh foreclosing. Lawless and Anthony say the string of foreclosurex andbankruptcies isn’t over. Edsel president of Nashville’s MarketGraphics Research Group, has predictesd about 10 to 15 more builder bankruptciesthis year. “The more solven t builders now are havingthe problems,” Lawless says. “I do not see the light at the end of thetunnelk yet.
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