Infamous Sea Cliff Mansion Slated to be Foreclosed Upon, AgainJune 1, 2021
While the infamous seven-bedroom home at 224 Sea Cliff Avenue, which was on the market for $19.675 million back 2016, appeared to have sold for $71,000 in a foreclosure auction last year, the “winning” bidder didn’t realize that the foreclosing party was a junior lender and the property would have come with around $17 million in senior debt and liens still attached to its deed.
The trustee sale was subsequently voided, which is a rarity, and the deed to 224 Sea Cliff ended up being taken back by the junior lender last August when a “do over” auction failed to generate another “winning” bid, a transfer that might appear as a “$50,000 sale” elsewhere.
Quickly “cleaned up” as pictured above, 224 Sea Cliff returned to the market listed as a “beautiful blank canvas ready for renovation,” with “HUGE potential,” for $17.5 million this past September but hasn’t sold.
And with a new notice of default having been filed by one the senior lien holders a few months ago, 224 Sea Cliff Avenue, which includes a private walkway down to a secluded beach cove below, is now slated to be foreclosed upon again next month.
We’ll keep you posted and plugged-in.
UPDATE (6/7): The foreclosure auction for 224 Sea Cliff Avenue was cancelled the day after we highlighted it, as noted below, but the notice of default remains. We’ll keep you posted and plugged-in.
Comments from Plugged-In Readers
The little cove is very cool. Hope someone goes something nice with it after it’s completely redone.
The least they could do is repaint the stairway to blend in a little better.
Odd that the junior would foreclose without paying off the senior – they’ve essentially wasted their legal fees and transaction costs (and, apparently, some clean up / reno costs too).
I believe the foreclosing loan is now on a balance sheet that leads up to Wells Fargo.
They should have the resources to ensure they understand the chain of title, and now that the previous occupants have been booted out by the foreclosing junior loan, there is no “evicting people during the pandemic” media coverage to worry about.
The WF loan dates from 2007, chain of title is a mess, but this foreclosure would apparently wipe out multiple junior lenders, including an individual’s self-directed 401K plan, and several private note. Swim with the sharks…
We might finally get a market-clearing transaction out of it, but more likely it will be delayed again and postponed again.
The LB bots, evident in comments to the 2012 item, are notably absent today.
I believe that was during a brief period of non-confinement.
Interesting that this train wreck is in foreclosure but current on property taxes (122k/yr, yikes) while I can think of other trophy properties in SF that are not in foreclosure but are half a million or more in arrears to the Treasurer.
This is because the Assessor’s Office is the queen mother of foreclosures.
When a county takes a property through a tax auction the action wipes out all recorded interests in the parcel.
Even if you are a lender and your loan is not being paid, you want to keep taxes current so that your interest in the property is not wiped out by a tax auction. A lender could add these tax payments on the amount owed by the borrower.
And in addition, lenders who pay to keep the tax auction at bay can add in interest, penalties and fat, fat fees to the amount in arrears for doing so. That can add up and in many cases can swamp the original amount owed on the actual loan.
Correct. Like most professions, lenders don’t work for free.
All correct… but if I’m not mistaken, the SF Assessor’s Office (or Treasurer) doesn’t actually start down the foreclosure path until a property is 5 years in arrears. Or that was their policy a few years ago, I’m not aware that it has changed. (There was a commercial property owner in my neighborhood who was whining for additional entitlements on his property, all the while he was four years delinquent on property taxes. That just seemed wrong to me, but that’s a whole different topic.)
But I can understand why a lender holding an eight-figure note might prefer to pay the taxes rather than take any risk, however small, that a more prompt foreclosure process might occur.
Has this property been occupied or should future bidders also expect a Pandora’s box of deferred maintenance?
I assume that “blank canvas ready for renovation” means Pandora’s box is already open.
Yeah, buyer will likely do a big overhaul. Isn’t it a rule for properties in this league that they must be remodeled at least once every decade?
At this point, I wonder how much the total tax payments (which the lender will want to be paid back for) plus the required deferred maintenance costs are. Neither number goes down the longer this stretches on.
Right. It’s highly likely that both numbers are well into the range where potential buyers will decide that this home is not worth the investment (paying off the senior lender, etc.), so this home will not change hands unless and until the senior lender forecloses and all the junior debt gets wiped out.
The junior lender should have already written off this loan as a total loss a few years ago now.
The family has been living in Tahoe
Come on, with an address number like that it is easy to see why one must avoid at all costs. 24 = easy death in Chinese. Rookies….
Sale Status: Cancelled on 06/02/2021
TS Number: 00000007190119
ASAP Number: 4731840
His County Property Taxes:
Assessed Value $$8,910,286
Land Value $$6,237,204
Annual Taxes $$111,573
UPDATE: The foreclosure auction for 224 Sea Cliff Avenue was cancelled the day after we highlighted it, as noted by a plugged-in reader above, but the notice of default remains. We’ll keep you posted (and plugged-in).
That could mean there was a technicality on sending him papers, having him sign them. Posting the property or a simple typo on the sale notice. I am thinking it will be reposted and republished.
UPDATE: Infamous Sea Cliff Mansion Suddenly Relisted for $2 Million Less
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