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the loan commitment. On May 15, 1990, the Pacific construction
loan was increased to $2.96 million.
On March 7, 1991, Pacific lent petitioners an additional
$320,000 (the $320,000 loan).5 Also, on or about March 7, 1991,
Pacific lent Mr. Assaad $250,000 (the $250,000 loan) secured by a
bank guaranty that Mr. Assaad’s brother posted through Credit
Suisse. A portion of this loan was made in renewal of a prior
loan of $150,000. On January 21, 1992, petitioners executed a
promissory note to Pacific of $350,000 for a loan that Pacific
made to petitioners (the $350,000 loan).
At some point in 1992, the house at 3 Isabella was sold for
$1,295,800, and the principal amount due on the Pacific
construction loan was reduced to $1.95 million. Mr. Assaad was
unable to sell the residence at 15 Isabella, and, in 1992,
Pacific sold the property through foreclosure. The trustee’s
deed states that the amount of consideration was $1.47 million,
and the amount of unpaid debt was $2,052,385.23. There were no
bidders at the foreclosure sale, and the property went to
Pacific.
On or about August 14, 1989, First National Bank of Daly
City (First National) lent Mr. Assaad $875,000 (First National
5Petitioners, as borrowers, Pacific, as lender, and Golden
Sunset Homes, Inc., as grantor, executed a commercial pledge
agreement with respect to the $320,000 loan. Golden Sunset
Homes, Inc., granted Pacific a security interest in a certain
note and deed of trust it held.
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