The Fremont County Public Trustee’s office has received two separate foreclosures encompassing four mobile home parks in Cañon City. Rivermaze Cooperative includes the parks at 1634 Poplar and 295 S. Raynolds. The outstanding principal balance for this foreclosure is $1,234,398. Rocky Mountain Homeowners Cooperative includes the parks at 1527 Chestnut and 1611 Cedar. The outstanding balance for this foreclosure is $1,930,924.
According to foreclosure records on the public trustee’s website, the current holder for both foreclosure cases is CC Canyon & Cedar LLC, and the lender for both is Resident Ownership Capital, LLC d/b/a ROC USA Capital. Nicholas Salerno, chief program officer for ROC USA Capital, in a phone interview with the Daily Record on Thursday, said each homeowner owns their home, and each co-op owns the land. He said there are 35 homes in the Rivermaze Cooperative and 55 in the Rocky Mountain Cooperative. “The homeowners themselves are not going to be held liable to the default in their loan – it’s the co-op,” Salerno said.
For years I have been writing about the fact that these “tenant-owned” mobile home park deals are built on incredibly shaky financing. And now my prediction is starting to come true. Read the above quote and tell me if it does not appear that the ROC deals on four different Colorado parks have gone into loan default. That’s how I read it.
It would be one thing if the tenants in these deals actually bought their own parks, but they don’t. Instead, they rely on non-profits to put up the down payment and guaranty the debt. And, unlike real corporate buyers that typically obtain 10-year conduit or agency debt, these things are cobbled together from flaky loan products that are never going to hold up upon renewal.
And now – in front of the whole world – the inevitable has started to happen.
I wonder if all those state bureaucrats preaching about how great tenant-owned deals are have seen this article? Can we finally put to bed the whole “tenant first option” scam? Time will tell.