Estate Financial evaluator appointed
June 16, 2008
San Luis Obispo Superior Court Judge Barry T. LaBarbera Monday initiated a complete evaluation of the books of Estate Financial Inc. (EFI) mortgage fund.
LaBarbera appointed Hanno Powell — an attorney from Fresno experienced in receiverships — to look into EFI’s records unencumbered for 30 days.
A group of investors, prompted by an UncoveredSLO.com article, hired attorney Roger Frederickson to help protect their investments. Frederickson filed a lawsuit and asked the courts to appoint a receiver.
EFI is one of a number of hard money lenders currently under fire in San Luis Obispo County. Investors have accused EFI of failing to provide required documentation; file deeds of trust as required by their agreements; and pay investors following property sales.
Last month, regulators from the California Department of Corporations revoked the firm’s license to sell mortgage fund securities and part interest in real estate investments. The Department of Real Estate is currently investigating numerous complaints filed against EFI.
While hundreds of investors waited in the court room, the judge and attorneys discussed issues for more than an hour behind closed doors. LaBarbera then announced that an evaluator would be appointed, and that the mortgage fund would be responsible for $10,000 towards the cost of Powell’s evaluation.
LaBarbera scheduled a hearing for July 22 and 23, in which Powell’s findings will be used to determine the management of Estate Financial’s $170 million mortgage fund.