By Christian Bautista
Bethany Liou tries to stop foreclosure of 63-unit Morgan Hill Complex
Bethany Liou is a Cupertino businesswoman, who paid a settlement of $50 million in a federal EB-5 lawsuit. She wants to stop a bank from foreclosure on a 63 unit condominium complex located in Morgan Hill.
According to an Aug. 15 complaint in Santa Clara County Court, Liou filed the case through a company called Diamond Creek Villa to protect two condo buildings at 15680 Santorini Lane, 15665 Nice Lane, and 15655 Venice Lane against foreclosure. Diamond Creek filed a Chapter 11 bankruptcy case, which included the case.
The Walnut Creek, California-based Mechanics Bank acquired the mortgage in 2019 as part of a merger between its U.S. subsidiary and the Dutch lender Rabobank. In the suit, the plaintiff alleges that the bank foreclosed on properties using “inaccurate interest rates calculations.”
According to court documents, Mechanics Bank had declared default in the January 2021. The principal owed on the loan at the time was $16,9 million. The bank increased the rate of interest on the loan to 7.6 per cent after the default.
Liou says that this was illegal, as the increase in interest rates was not applied only to the monthly payment but also the unpaid balance. Liou says that she fell “further into default with an increasing rate” as her $60,000 mortgage payment almost doubled overnight. According to the complaint, Mechanics received a windfall of $2 million as a result of the alleged incorrect calculation.
A Mechanics Bank rep declined to make a comment, citing a company policy which prohibits making public comments on pending lawsuits.
Liou, her company Golden California Regional Center and the Securities & Exchange Commission reached a settlement of $50 million in 2019. Federal agency accused Liou of diverting $45,000,000 from foreign investors to her own accounts. Foreign citizens wanted to invest in a Cupertino property project for the EB-5 green card program.
Liou seeks damages in her suit and a restraining court order to prevent Mechanics selling the property.
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