NEWPORT BEACH — Charging that home builder J.M. Peters Co. has defaulted on a $12-million loan, an investment group is asking a court to foreclose on a retirement community in Mission Viejo that secures the loan.
A lawsuit filed Oct. 22 in Orange County Superior Court by West Coast Land Fund, a limited partnership, asks that Superior Court Judge William F. McDonald foreclose on at least portions of Palmia, a 208-acre retirement community at Monterey Boulevard and Santa Margarita Parkway in Mission Viejo.
The development is planned for 904 single-family homes and is about half completed, said Chuck Wilson, senior planner with the city of Mission Viejo.
In court documents, West Coast charges that J.M. Peters, based in Newport Beach, failed to make an $11-million loan payment due Sept. 1. The court documents state that the property should be sold to help pay off the loan.
In the suit, West Coast asks the judge to appoint a receiver to take immediate control of the property and "retain and sequester all rents, profits, income and proceeds of the property."
Representatives from J.M. Peters and lawyers for West Coast did not return phone calls Tuesday.
The suit centers on a $12.3-million loan provided to the home builder in 1989 by Home Federal Savings & Loan in San Diego. The loan was secured by a deed of trust to the Palmia property.
According to court documents, on July 28 the loan was signed over to West Coast, which alleges in the suit that "JMP has failed and refused to pay the outstanding principal and interest."
Known for its mass construction of high-quality, expensive homes in Southern California, J.M. Peters Co. was sold to San Jacinto Savings & Loan of Houston in 1985. The S&L was seized by federal regulators in 1990. Two years later, Capital Pacific, a privately held Newport Beach company, bought J.M. Peters Co.