Magazine article American Banker

Epic Still Seeking Partner for Syndications

Magazine article American Banker

Epic Still Seeking Partner for Syndications

Article excerpt

aving finally made some overdue payments on its $1.4 billion in outstanding mortgages and mortgage securities, the Equity Programs Investment Corp., or Epic, last week continued to seek a partner to rescue the company's syndication business.

Epic late Thursday announced that it had made a $2.04 million payment to bring some $147 million of its mortgages up to date, and said it may make additional disbursements to avoid defaulting on more of its its debt. The announcement came a day after a lawsuit filed by the trustees for the mortgages, in which the trustees sought to replace Epic in collecting and distributing the mortgage payments.

The trustees accused Epic of protecting the interest of its limited partners and depositors of its parent, Community Savings & Loan Association, Bethesda, Md., over the interests of the institutions that bought Epic's loans. In a statement Thursday, though, Epic called the suit "an unwarranted action to seize assets that rightfully belong to the partnerships."

Epic, based in Falls Church, Va., announced two weeks ago it was withholding payments on the mortgages and mortgage securities that it sold to finance the purchase of some 25,000 homes, largely in Sunbelt metropolitan areas. Through affiliated companies, epic managed the rental units, sold them through limited partnerships, and also provided the partners with loans on the homes that Epic sold through the secondary mortgage market.

The highly leveraged deals are considered some of the most speculative in the often risky world of real estate syndications. …

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