By Christian Bautista
Bethany Liou attempts to halt foreclosure on Morgan Hill complex of 63 units
Bethany Liou from Cupertino is suing a Morgan Hill-based lender to keep them from foreclosing a 63 condo complex. Liou previously settled a case involving federal EB-5 funds with a payment of $50,000,000.
Liou has filed, on behalf of Diamond Creek Villa through a Santa Clara County complaint, an action to stop the foreclosure process for two condominium buildings, located at Santorini Lane 15680, Nice Lane 15665, and Venice Lane 15655. Diamond Creek Chapter 11 has moved the case to bankruptcy court.
The Walnut Creek Mechanics Bank defendant acquired the loan as part its 2019 merger of Dutch lender Rabobank U.S. The lawsuit alleges the bank sought foreclosures on the properties on the basis of “inaccurate, illegal interest rates.”
According to court records, Mechanics Bank declared a non-payment on the properties by January 20, 2021. In January 2021, the principal unpaid on the mortgage loan was approximately $16,9,000,000. In response to this default, the bank increased interest rates from 2.6 percent up 7.6 percent.
Liou says the interest rate was increased illegally because the whole unpaid amount was included in the calculation, and not only the monthly installment. Liou claims this caused her “to fall further and more into default at an ever increasing rate,” as her mortgage payments of $60,000.00 per month almost doubled in one night. According to the lawsuit, Mechanics was able to “get a big windfall” worth $2 million because of alleged errors in calculation.
A Mechanics Bank Representative declined to provide comment citing a bank policy prohibiting public comments about pending litigation.
Liou and Golden California Regional Center settled a $50-million settlement with Securities & Exchange Commission in 2019. The federal agency charged her with diverting at lease $45 million in foreign investor funds into her own personal accounts. These foreigners were seeking to invest into a Cupertino Real Estate Project to be eligible for Green Cards under the EB-5 programme.
Liou has filed a lawsuit seeking damages, as well as a restraining orders that will prevent Mechanics to sell the property.
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