Bank finalizes Forest Lakes Garden Homes foreclosures
The bank owning the debt backed by foreclosed properties in the Forest Lakes Garden Homes neighborhood has clear title to them after last week’s judicial foreclosure auction at the Garland County Court House.
Simmons Bank initiated the foreclosure against Arkansas Land & Equipment LLC and its owner, Robert Malt, in April 2015 after Malt defaulted on two promissory notes. Division 4 Circuit Judge Marcia Hearnsberger entered a more than $1.8 million judgment against Malt in June, which includes more than $50,000 in attorney fees.
Simmons’ opening bid of more than $1.3 million was the only one offered at the auction. The properties are now the bank’s to sell as credits against the judgment.
Paul Bailey’s home is in the cul-desac where 13 of the foreclosed properties are located. He said he hopes the bank will find a proper disposition for the three unoccupied homes Malt owned on either side of Bailey’s property.
“Simmons came through over a year ago and boarded up the houses,” said Bailey, who, along with several of his neighbors, attended last week’s auction. “We’ve been in a Catch-22. They said they didn’t own them, and Malt said he didn’t own them. They didn’t get anything done for two years, and it’s been a mess. It’s devalued every house in the neighborhood. They’ve shown a lack of care in rectifying the problem.”
A bank spokeswoman said Simmons plans to sell the properties, which include four model homes on Apple Blossom Way.
“This property has been the subject of extended litigation, which resulted in (last week’s) foreclosure auction” Caroline Makris said in an email. “Simmons Bank was the successful bidder and will place the property in its inventory of foreclosed real estate once it receives all official documentation. The bank plans to then market the property in accordance with its normal procedures.”
A group of Forest Lakes residents purchased the neighborhood clubhouse, more than 2 acres along Twin Points Road and more than 12 acres of common area in the neighborhood from Bank of the Ozarks last year. Malt deeded the three tax-delinquent parcels to the bank, which, according to a redemption deed filed in September, paid $33,624 in unpaid taxes, interest and penalties to the commissioner of state lands.
The Centre at Forest Lakes No. 1 LLC purchased the land from the bank in October for $500,000, according to property records. Norm Duncan, a member of the Centre’s executive board, said 10 households in the more than 100-household neighborhood jointly own the clubhouse and other parcels. He said about 60 households have memberships at the clubhouse, or Centre.
The facility comprises a spa and salon, event space and the neighborhood pool.
“Mr. Malt was unable to take care of the property,” Duncan said. “To retain that kind of capability for our residents, a group in the neighborhood was able to buy it for a reasonable price. They’ve been successful at keeping the Centre open for Forest Lakes residents and for rentals.
“The community is regaining status and getting its memberships back up. We expect to grow the membership again this year.”
Bank of the Ozarks acquired the acreage between Twin Points and Higdon Ferry Road last year after Malt defaulted on a $2 million revolving line of credit he took out in March 2007, according to property records. He purchased the land for $4.5 million in 2005.
The Arkansas Contractors Licensing Board revoked Robert Malt Construction Inc.’s license in September 2015, levying $322,000 in civil penalties against Malt for misconduct and operating Arkansas Land & Equipment without a license for 730 days.
The misconduct charges included findings that Malt convinced property owners to deed him lots they had purchased for prospective homes his companies were contracted to build. In some instances, Malt never transferred the properties back to the original owners, making it difficult for them to get a clear title.