Comstock agrees to foreclosure plan
Washington Business Journal - by Jeff Clabaugh Staff Reporter
Comstock Homebuilding Cos., which said this summer it would be forced to cease payments on nearly 60 percent of its bank loans, has reached an agreement with one of its lenders that will extend loan payments for 10 years in exchange for foreclosing on certain properties.
Bank of America will foreclose on three housing developments in Atlanta: the Highland Avenue, Brentwood Estates and Senator’s Ridge projects. Bank of America will also release Comstock of $5.7 million in obligations associated with those projects and extend until 2018 the maturity on $3.1 million in outstanding debt under its line of credit.
Reston-based Comstock will not be required to make any payments until January 2010. It agrees to make interest-only payments from 2010 to 2012, and then principal and interest payments after that.
In September, Comstock Homebuilding Cos. reached an agreement with Regions Bank, ending its obligation to repay $5.3 million in exchange for foreclosing on Atlanta area properties. It also reached a similar agreement this year with BB&T Corp. related to $32.7 million in debt.
“We are working hard with all of our lenders to negotiate loan terms that take into account current market conditions,” Comstock chief executive Christopher Clemente said in a statement.
Comstock builds houses in the Washington market, as well as Atlanta and Raleigh, N.C.
Comstock stock (NASDAQ: CHCI) trades at just 21 cents per share. The company has lost 68 percent of its market value this year, giving it a market capitalization of about $3.8 million.
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