Bank sues to recover Houts construction loan

FORT COLLINS — First National Bank of Pierre, South Dakota, with branches in Northern Colorado, has filed suit against Houts Development and Construction LLC of Fort Collins and its owner, David Houts, seeking recovery of a construction loan.

The unpaid principal on the loan, interest, default interest, late charges and fees total $642,758. The original loan amount was $596,180.

The suit, filed Thursday in Larimer County District Court, alleges that Houts received a loan in September 2017 from Advantage Bank, which was acquired by First National Bank of Pierre, South Dakota, in August 2019. Six times over the course of the loan, the bank and Houts agreed to changes in terms and extensions. 

Houts told BizWest Friday that he had yet to receive anything from the bank about a suit. “We are aware of the balance,” he said.

Houts said the loan was a typical construction loan to finance building a single-family home, which Houts said is appraised at $1.15 million. He said that the house is almost ready to sell but lacks appliances, which are back ordered. “That has complicated closing,” he said.

The bank also filed a foreclosure action today on the property at 4018 Ridgeline Drive in Timnath, listing in the foreclosure notice the same outstanding loan amounts.

That notice joins three others filed by other lenders, including a $1.02 million foreclosure notice filed Feb. 17 by 1Sharpe Opportunity Intermediate Trust for unpaid loans on lots in the Sunrise Ridge development of Fort Collins, and two foreclosure notices for $256,342 and $767,866 filed Jan. 6 by TBK Bank SSB, a Dallas bank doing business in Colorado as Colorado East Bank & Trust. Properties involved in the TBK foreclosure include four addresses on Sunglow Court in Fort Collins.

Those four homes are listed on Realtor.com at prices ranging from $527,000 to $646,000, but three of the four are shown as “off the market.” 

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