Bank Forecloses On Entire Fresno Neighborhood

January 29, 2010 12:00:00 AM PST
A Valley builder lost dozens of lots to foreclosure Friday and the effects could be long lasting for neighbors.McMillin Homes walked away from a southeast Fresno development and it may take a long time to fill the space.

The last call for part of the Sunnyside Ranch development came at auction in downtown Fresno. Nobody wanted to bid on the collection of dirt, weeds, and graffiti.

Some underground wiring means the dirt is ready for someone to build 35 homes, but the developer McMillin Homes is giving up on it, rather than paying about $1 million debt.

The developer didn't return repeated phone calls from Action News, but other builders say it's not necessarily a sign of trouble for McMillin, which was Fresno's second most active builder in 2009. It may just be a business decision.

"So they say look at it and say, 'I've got this much owed on the property,'" said Mike Prandini, president of the Building Industry Association. "'It's worth this much. If I walk away from it, then I don't have that obligation. Let the bank take it back.'"

McMillin started developing in the area in 2007, just as the housing market started to crash. Now, the land could sit idle for a few more years until the market rebounds completely.

"The bank may have to sit on it for a while," said Prandini. "Or they may sell it to an investor and let an investor sit on it for a while."

But with no bids at auction and no paving, lighting or landscaping, it may be a hard sell. And real estate analysts think it may take a long time for the entire Sunnyside area to rebound.

The neighboring Sunridge Estates development is almost completely empty. And McMillin walked away from another development, selling its last 57 lots to another builder, Lennar, which is having some success selling them off.

But residents are concerned that having dirt for neighbors will drive property values into the ground.

"The price we got from McMillin was pretty good, so that's why we bought this home," said Harry Singh. "But the situation got worse day by day."

Builders say the property value shouldn't go down just because the big lot is vacant. They say what will drive it down is if weeds get really out of hand, the graffiti proliferates, and the lots start looking bad.


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