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Eron Lenders
Project Name: Mariner Ridge
Lender update
May 27, 1998
Further to our letter dated December 19, 1997 we are writing to provide you with a further update on the status of the above noted mortgage.
Project Status
The mortgage term expired on April 1, 1998 at which point the borrower went into default.
The eleven remaining townhouses forming the principal security on this second mortgage have now been completed and are on the market. The borrower originally listed the units at prices ranging from $207,900 to $215,900. To date there have been no firm offers on any of the eleven units.
Rather than commence a foreclosure action, which may negatively impact on the net realizable value of the property, the Judicial Trustee has agreed at this time to allow the borrower to continue to market the units provided that the prices are lowered to between $194,900 and $199,900. Our appraiser has informed us that this price range is more realistic given the prevailing market conditions, although it is estimated that it will take as long as twelve months for all the units to be sold. To complete sales in a shorter time frame would require further significant price reductions, which would result in a decrease in the equity available to lenders.
The first mortgage holder, Affirmed Mortgage Group ("AMG") is in agreement with the above pricing strategy. AMG has also agreed to let the borrower pay to the Judicial Trustee all additional funds over their minimum unit discharge amount of $121,500, as each unit sale takes place. These funds will be paid provided that all AMG's interest and fees are current, and once a two month interest reserve has been established.
In anticipation of a shortfall arising after realisation on the eleven units, the Judicial Trustee is taking steps to realise on the other collateral security that exists under the terms of the loan.
Lender Communications
As you are probably aware, we have a web site at http://www.eron-pwl.com. On this site you will find project specific updates as well as related court orders and other general information.
While we will continue to communicate directly with all lenders, we urge you to take advantage of the web site so that you can receive first hand information from Price Waterhouse Limited in the most cost effective manner we have available.
We plan to issue another letter as soon as we have significant new information to report. In the meantime, if you have any specific questions or information concerning the project please contact us in writing at 500 - 1380 Burrard Street, Vancouver, BC, V6Z 2H3 or by fax at (604) 688-6128 marked to the attention of Mariner Ridge - Project Lead.
Yours truly
Judicial Trustee
Eron Lenders
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