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He Reigns Over L.A. Real Estate's '40 Thieves'

September 28, 1987|FREDERICK M. MUIR | Times Staff Writer

Most days of the week, a band of men and women with large cashier's checks in their pockets or briefcases full of cash gather on the steps of the Los Angeles County Courthouse for the auctions of foreclosed property.

The assembled group, known in the real estate business as the "40 Thieves," are the sharks who prowl Los Angeles seeking to snap up properties when the owners fall on hard times.

One of the biggest and most successful of the crowd is William D. Little--recognized by his peers as a great white among the sharks.

Since the early 1970s, Little has bought and sold thousands of Los Angeles-area properties through the foreclosure process and continues to buy or sell about two pieces of real estate a week. He now holds between 200 and 400 area properties--the exact number, he said, "doesn't make much difference."

Routinely Files Lawsuits

And just as routine as his buying and selling of property is his filing of lawsuits.

From 1977 through 1986, Little has filed more than 2,200 complaints--mostly eviction proceedings--in Los Angeles Municipal Court--nearly one for each day that the court has been open for a decade.

And in state Superior Court, Little has either sued or been sued more than 400 times during the same 10-year period, and is involved in about 45 suits filed so far this year. The actions cover a wide variety of business disputes.

In the late 1970s, Little was hounded by the press, public interest attorneys and, for a time, government investigators because of his aggressive efforts to scoop up troubled properties.

Despite his combative and controversial business style, the Canadian-born Little has kept a low profile for most of the 1980s.

But now he has changed the strategy of his real estate business--buying fewer properties and holding more as a landlord--and Little is again in the public eye for his aggressive use of the eviction process.

Nearly Evicted Woody Herman

Earlier this month, ailing band leader Woody Herman was nearly evicted from a Little-owned house in the Hollywood Hills. Fans finally came up with the money to pay the back rent, and Herman was allowed to stay.

Little's lawyer said later that Little had been unaware that Herman was living in the house or that he was ill, adding that if he had known, "the matter would have been treated altogether differently."

Two weeks later, Little tried to evict an elderly Mid-City woman, even though she was willing and able to pay rent. Only after the intervention of a public-interest attorney and City Councilman Nate Holden did Little say the entire matter was all a mistake and the woman was allowed to return home.

But these cases prompted Holden to ask the Los Angeles city attorney to investigate Little's use of the eviction process. A spokesman for the city attorney said the facts are being reviewed. Holden has also asked the City Housing Authority to look into Little's properties in the city's subsidized rent programs.

Largely Misunderstood

Little maintains that his business of buying troubled properties from troubled people is largely misunderstood by the public.

"I believe it is a legitimate function," said Little in an interview last week at the courthouse. "There is nothing wrong with buying at a foreclosure sale. Someone will buy, or it goes back to the lender."

His role, he said, is to "recycle" properties. "Not just buying, but fixing up (properties) to realize their equity."

And, he said, "I don't create the problem that leads to the sale."

Others see it differently.

"He became a self-made millionaire on the broken backs of a lot of little people," said Gary Blasi, an attorney with Legal Aid Foundation of Los Angeles. "These people used to have mortgages of $90 a month. Now they have rents of $600. He and others (in the same business) have decimated low-income housing in South-Central L.A."

Buy Mortgages

What Little and other investors in foreclosed and distressed property do is buy mortgages or other loans or liens against a property that are in default. If the equity left in the properties is greater than the total amounts owed, the buyers make the difference.

One way to get a jump on the competition is to acquire the rights to a property before it goes to a public auction.

In many instances during the 1970s, according to court documents, Little was able to buy houses from unsophisticated owners facing foreclosure for as little as $500 after promising to pay off delinquent loans. Little would then often pocket tens of thousands of dollars by selling the house.

Today, he said, he does most of his buying at auctions and usually sends a representative to do the actual bidding.

Group Changes

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