Banking experts say disputes over development land values threaten to become more common as loans for the properties enter default leaving room for battles over differing appraisals. An example of that was on display in an Ann Arbor courtroom this month as Bank of Ann Arbor sought over a half-million dollars from developers Francis and Marcus Yono after they defaulted on lots in West Bloomfield and Brighton Township.
The bank's appraisal valued the 26 lots securing the loan at $2.09 million, while the developers' valuation was $2.75 million. The outstanding loan amount is about $2.6 million, leaving the court battle over whether the Yonos are free and clear, or owe the bank $530,000 on the loan, plus more in unpaid property taxes.
While deficiency cases are most often settled out of court, lawyers and real estate professional said, the valuation discrepancy - and the possibility of an award to the bank - in this case prompted the trial.
Excerpted from Mlive.com.
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