Bank shutdown leaves condo loans in limbo

“Time will tell,” said Michael McGwier, an Atlanta executive managing director for Dallas-based Trammel Crow Residential, which used a Corus loan for its Luxe project. “But we will obviously be watching and working with the FDIC to see what happens.”

Corus became one of the nation’s most prolific backers of condo projects in fast-growing Sun Belt areas including Florida, Nevada and Atlanta. But losses mounted amid the real estate bust, and regulators shut the bank down last Friday.

Chicago-based MB Financial Bank bought Corus’s deposits but declined to take any construction loans. The FDIC said it plans to unload the loans in the next month in a “private placement” for “highly specialized investors” who must be pre-qualified to participate.

At one time, Corus had more than $600 million in loan commitments to construct nearly 2,000 units in and around Atlanta, according to a report from Ackerman Trinity. Some of those loans are no longer part of the bank’s Atlanta portfolio, developers and analysts say.

In addition to Luxe, recent projects funded by Corus loans include, Aqua, the Atlantic, the Brookwood, Horizon at Wildwood, and Mezzo.

What will happen now depends largely on who buys the loans, said David Green, a principal with Ackerman Trinity. For buildings that haven’t closed sales the units could be converted to rentals. The new owner could also continue to sell the units, but at a discounted price, he said.

“What will happen to the unsold units is the million dollar question that nobody knows the answer to,” Green said.

Staff writer Paul Donsky contributed to this report.