6th Street Investors v. Hanmi Bank CA2/2

FACTS

The Complaint In 2006, Hanmi Bank (the Bank) loaned Hoover & Venice, LLC (Hoover) $1.6 million to purchase a 46-unit apartment house on West Sixth Street in Los Angeles (the Property). The note was secured by a deed of trust on the Property. Hoover allowed the Property to become substandard and untenantable, and was cited numerous times by the Los Angeles Housing Department (LAHD) from 2006 to 2008. In 2008, LAHD placed the Property into its Rent Escrow Account Program (REAP). Hoover defaulted on the note. The Bank recorded a notice of default in 2009, and a trustee’s sale was scheduled, but not conducted. Instead, the Bank marketed Hoover’s note. A number of adverse conditions affected the Property: it flooded in February 2010; it was in REAP; and it was substandard. The Bank did not take possession of the Property or appoint a referee to manage it. It refused to allow potential purchasers of the note to inspect the Property, including plaintiff. Unaware of the adverse conditions at the Property, plaintiff paid $934,000 for the note and entered a Loan Purchase and Sale Agreement (Agreement) with the Bank on April 1, 2010. The Bank assigned the note and deed of trust to…