First National Bank Edinburg and Tundra Village Scandal Hits TV News in
Rio Grande Valley
Ortega not returning phone calls from KVEO!
Read and Watch entire KVEO report & Video Clip:
Sunday, January 27, 2013
Lucky For First National Bank Edinburg All the Facts Haven't Surfaced Yet!
Texas-size troubles for the state's No. 12 bank
By Patrick Danner
Updated 12:41 am, Sunday, January 27, 2013
- Tundra Town Home Village was developed by Mauro Padilla, who went to federal prison for lying to lender First National Bank Edinburg. Thursday, Jan. 24, 2013. The property in on Highway 16 S. just north of 1604.Photo: Bob Owen, San Antonio Express-News
Read more:
Is First National Bank Edinburg up Tundra Shit Creek?
Did Padilla have help?
Hmmm.....Stay Tuned!
Published 6:17 pm, Thursday, January 31, 2013
First National Bank Edinburg 4Q Results and Another Lawsuit!
The Hits Keep Coming for First National Bank Edinburg!!
Just When You Thought Things Hit Rock Bottom for the Edinburg Idiots, Their Numbers Continue to Worsen!!
STRAW MEN REVOLT!!
First National Bank's numbers worsen
By Patrick Danner pdanner@express-news.net
Published 6:17 pm, Thursday, January 31, 2013
The numbers at embattled First National Bank have turned even uglier.
The Edinburg-based bank lost $42.8 million in the last three months of 2012, contributing to a $125.3 million loss for the year, according to a quarterly report First National filed this week with the Federal Deposit Insurance Corp.
By comparison, the lender lost $18.9 million in the fourth quarter of 2011 and $26 million for all of 2011.
The most recent quarter was the bank's worst since it lost $100 million in the third quarter of 2008. That's when the bank's holdings in Fannie Mae and Freddie Mac were virtually wiped out after the mortgage giants were seized by the federal government.
The bank also suffered a 40 percent drop in its cushion against losses in the latest quarter. The so-called Tier 1 Capital ratio, a measure of a bank's financial strength, fell to 4.3 percent in the latest quarter from 7.2 percent in the third quarter. It's a strong sign the bank needs to raise capital.
The ratio is far below where banking regulators want to see it. About two years ago, the Office of the Comptroller of the Currency ordered the bank to maintain a Tier 1 capital ratio of at least 9 percent.
First National operates 57 branches in Texas, including four in San Antonio. It was Texas' 12th largest bank based on $3.41 billion in assets at the end of the third quarter.
The latest quarterly report showed the bank's assets slipped to $3.29 billion.
First National's troubles were chronicled in a Sunday story in the Express-News. One analyst put the bank at a high risk for failure or takeover. Deposits at First National are insured by the FDIC up to $250,000 per depositor.
Saul Ortega, First National's chairman and CEO, didn't respond to a request for comment Thursday. But in an interview last week he blamed the bank's problems on the economy and an aggressive push in real estate lending.
Ortega added the bank would be profitable in the current quarter, and that it would not need to raise capital or find a buyer for the bank. “The bank has plenty of liquidity, and I think we're on our way,” he said.
BauerFinancial Group, a Coral Gables, Fla., firm that analyzes banks, gave First National a “zero-star” rating — the lowest rating — after third-quarter results were released. Only two other Texas banks earned that dubious distinction, according to BauerFinancial President Karen Dorway.
First National's so-called Texas ratio, a measure of how much stress an institution is under, was 220 percent at the end of the year. When the ratio exceeds 100 percent, a bank's capital is no longer adequate to absorb losses from bad loans and repossessed real estate.
First National had the second highest Texas ratio among banks with at least $1 billion in assets at the end of the third quarter, according to the website DepositAccounts.com .
Contributing to the bank's dismal results in the latest quarter was a $34 million loss on the sale of repossessed real estate. For the year, the bank lost $92.5 million selling repossessed property.
Ortega told the Express-News last week that the bank “took its hits” on the sale of repossessed property in the early part of 2012. “The latter part (of 2012), we seem to continue to sell stuff at market values.”
But the $34 million fourth-quarter loss on repossessed property was the highest of any quarter last year.
The bank, however, did reduce the amount of bad loans and repossessed real estate on its books to $623.2 million in the fourth quarter, down from $730.2 million in the third quarter. First National had $89.7 million in reserve to cover future loan losses, or less than 24 percent of its $378.2 million in noncurrent loans on Dec. 31. The industry average is about 60 percent and the preferred level is 100 percent — “meaning there is $1 in the reserve cookie jar for every $1 of noncurrent loan,” according to Kenneth Thomas, an independent banking analyst and economist in Miami.
Besides its bad loans and sour real state holdings, the bank has been dogged by various legal troubles.
Most notably, a Harris County jury last summer awarded a hospital investment group a $118 million verdict after finding that First National and others had “fraudulently and illicitly stolen control” of three hospitals from the group.
The verdict was reduced to $66 million by a state court judge in November.
The bank was negotiating to settle the case, Ortega said last week. A banking source this week said the case has been settled.
The bank's latest financial report shows it took a $15 million pretax “contingency” in the fourth quarter. It couldn't immediately be determined if the contingency — essentially a cash reserve for possible expenses — was related to the case.
First National also is defending itself against a group that invested in a failed San Antonio townhouse project. Developer Mauro T. Padilla was found guilty of lying to the bank to obtain construction financing for the project. He was sentenced to 12 years in prison.
The investor group alleges the bank failed to verify that Padilla actually had completed work before continuing to lend him money. The group seeks at least $25 million in damages from the bank.
More recently, a Houston businessman sued First National for fraud in September.
Ali Assi alleges he acquired some $20 million in troubled property from the bank in return for the bank financing the entire purchase price. The suit says the bank agreed if the properties failed to produce sufficient revenue to service the debt, it would take the properties back “without a deficiency and without damaging” Assi's credit.
When the properties failed to generate enough revenue to cover what was owed First National, the suits says the bank denied the existence of the deal and initiated foreclosure proceedings. The bank has filed a counterclaim seeking at least $20.5 million in damages.
The parties are trying to negotiate a settlement, Eugene B. Wilshire, Assi's lawyer, said Thursday.
WELL, WELL, WELL!!
DOES IT SOUND LIKE SOMEBODY'S "STRAW-MAN" ISN'T HAPPY??
MORE 100% FINANCING??
Hurry up and settle this one, too!!
http://www.mysanantonio.com/business/article/First-National-Bank-s-numbers-worsen-4241043.php
Monday, March 19, 2012
Tundra Village still awaits improvements!
By Patrick Danner
Updated 08:32 p.m., Monday, March 19, 2012
Read more:
BUSINESS: The Tundra Village townhouse project was built by Mauro Padilla before he was arrested for lying to the bank, which ultimately foreclosed on the project. The development was later sold to another developer, Jadon Construction, yet no work has been done one the project since the bank foreclosed. HELEN L. MONTOYA/hmontoya@express-news.net. Photo: HELEN L. MONTOYA, San Antonio Express-News / SAN ANTONIO EXPRESS-NEWS
Developer Mauro Padilla has been locked up in federal prison for nearly a year for lying to First National Bank to secure construction money for a South Side town-house project, but the Edinburg-based bank is still dealing with the fallout.
This month, for the second time in about 21/2 years, First National foreclosed on the Tundra Town Home Village project. The development comprises 37 now-largely dilapidated fourplexes that have suffered from more than three years of neglect and exposure to the elements.
Last week, a deal to sell the property fell through, First National CEO Saul Ortega said.
The bank again is scouring for a buyer to take over what has become an albatross, but any purchaser will have to overcome a litany of obstacles before commencing construction.
Among the issues cited by Bexar County officials:
A plat, or master plan for the development, was never approved.
No roads, electricity, water lines or sewer lines were installed.
At least two fourplexes are built in a floodplain.
Some are built on existing or proposed lot lines.
Building permits were never pulled on about a dozen of the complexes.
Buildings have deteriorated so much that their structural integrity is questioned.
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“There are so many things wrong with this that it's hard to know where to start,” County Engineer Renee Green said. “Whoever takes over that property probably needs to start over from scratch.” By that, she means the fourplexes should most likely be razed.
But Ortega sees some of Tundra Village's complexes as salvageable.
“It's a piece of property that's got some potential,” Ortega said. “It just needs a little bit of creativity (to) figure out how we can make it work.” He added that the bank has a few people who are interested in acquiring it.
Craig Roberts, the county's interim fire marshal, said he wants an engineering analysis done before he'd agree that structures can remain.
“Everything is in such bad shape now that we would have to have engineering documents showing that an engineer believes that the building is structurally safe and structurally sound,” he said.
Tundra Village was supposed to be a subdivision that would attract workers in the nearby Toyota plant. Forty-six investors paid about $2 million to developer Padilla to acquire units, which they planned to rent.
Padilla later pleaded guilty to defrauding First National for lying to get construction draws on a loan and using some of the money to pay for personal expenses. He was sentenced last year to 12 years in prison.
First National foreclosed on Tundra Village for the first time in the summer of 2009, taking the property back from a Padilla company.
A few months later, the bank sold the property to Jadon Construction Co. Inc., a company based in First National's hometown that was brought in by the bank to fix up Tundra Village. The bank provided Jadon a $9.3 million loan.
Ruben Cazares, Jadon's president, said it would have cost $22 million (including the loan) to repair existing structures and build the remaining fourplexes. Padilla had planned to build 78 fourplexes
“The bank felt at that point it was way too much money to put back into the property,” Cazares said. So the property has sat essentially untouched.
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At Padilla's sentencing last April, Jim Davis, a First National regional president, put the cost to finish Tundra Village at closer to $18 million. Even at that amount, he said the bank couldn't “make economic sense” out of spending the money to complete the project.
Davis added at the time that the bank had just received an appraisal on the property that valued it about $2.1 million. Asked if it was worth that much, Davis replied, “I wouldn't give you that much for it.”
At the foreclosure auction this month, First National bid more than $4.7 million to take the property back from Jadon.
Ortega explained why the bid was so far over the appraisal: “We did have some sort of letter of intent to purchase the property for a value in that range.” The bank has had the property listed for sale on its website for $6 million.
The foreclosure occurred about two months after federal banking regulators brought an enforcement action against First National for “unsafe and unsound practices and violations of law.”
The Office of the Comptrol- ler of the Currency ordered the bank to, among other things, hire a loan workout specialist to lead efforts to “resolve and reduce problem assets.”
At the end of last year, First National had a troubled asset ratio of 169 percent, significantly higher than the national median of 13.1 percent, according to American University's Investigative Reporting Workshop's BankTracker website. The higher the ratio, the more stress a bank is under.
The bank has been selling some of its troubled assets, Ortega said. “The numbers are going to continue to get better,” he added. pdanner@express-news.net. Express-News archives contributed to this report.
Tuesday, January 11, 2011
Trustee moves to dismiss or convert Padilla's
Bankruptcy
Bankruptcy
Trustee's office acts in developer Padilla's case.
By Patrick Danner pdanner@express-news.net
Published: 07:50 p.m., Tuesday, January 11, 2011
Read more: http://www.mysanantonio.com/business/article/Trustee-moves-to-dismiss-or-convert-Padilla-s-951149.php#ixzz1AniIp4QP
By Patrick Danner pdanner@express-news.net
Disgraced developer Mauro T. Padilla III's bankruptcy reorganization apparently doesn't have much of a chance of succeeding. The U.S. Trustee's office has asked a bankruptcy judge either to dismiss Padilla's bankruptcy case or convert it to Chapter 7 liquidation. Padilla — who faces federal prison time after pleading guilty last year to lying to a bank to secure additional funding for construction of a townhouse project near the Toyota plant — doesn't have “sufficient cash flow to continue in this Chapter 11 case or pay any significant amount to the millions of dollars in claims filed in the case,” the U.S. Trustee's office alleged in a court filing last week.
Padilla, along with wife Maria Del Rosario Padilla, filed for bankruptcy in August after a lender moved to foreclose on their San Antonio estate at 8815 Mount Arcadia. The property has been for sale with an asking price of $1.4 million, though the value is listed at $839,256 in the bankruptcy petition.
Various creditors claim the Padillas have failed to make payments to them. The creditors want the court to allow them to enforce their claims against the Padillas. The Padillas' bankruptcy petition lists almost $1.2 million in assets and $7.7 million in liabilities.
Mauro Padilla is set to be sentenced March 2, the U.S. Trustee's office noted in its filing, “further diminishing the debtors' ability to pay post-petition obligations or fund a plan of reorganization.” Federal prosecutors want him sentenced to more than 121/2 years in prison. Steven Cennamo, a bankruptcy lawyer for the Padillas, said he will oppose the motion to convert or dismiss the case.
“We're going to file a plan of reorganization to pay the creditors,” Cennamo said.
The Padillas last month asked the court to extend their exclusive right to file a plan of reorganization until late February. They need additional time to resolve how much they owe the IRS, Cennamo said.
“The IRS has filed a $603,362.25 priority claim which makes any (reorganization) plan infeasible,” the Padillas' lawyers stated in court documents last month. It couldn't be determined if the Padillas will oppose the U.S. Trustee's motion, but a conversion to Chapter 7 likely would mean the Padillas would have to give up control over their assets to a bankruptcy trustee. The Chapter 7 bankruptcy trustee can sell debtor assets that aren't exempt from the reach of creditors. The trustee also could prosecute any claims of the debtor.
If a bankruptcy is dismissed altogether, then creditors can sue the debtor to take whatever assets they can.
Mauro Padilla in May pleaded guilty to a charge of making false statements to First National Bank for a loan on Tundra Town Home Village, a project he was building on Texas 16. Three counts of bank fraud and two other counts of making false statements to a bank were dropped as part of Padilla's plea deal.
Separately, a company that is one-third owned by Maria Padilla filed for Chapter 11 last week. Papo Property Holdings LLC owns about a dozen properties.
Thursday, September 16, 2010
Troubled developer files for bankruptcy
By Patrick Danner - Express-News Published: 12:00 a.m., Thursday, September 16, 2010
Two years after a planned upscale residential development aimed at Toyota workers on the South Side unraveled in scandal, legal problems continue to mount for its former developer.
Mauro T. Padilla III, who faces federal prison time after pleading guilty to lying to a bank to secure funding for Tundra Town Home Village on Texas 16, and his wife quietly filed for bankruptcy late last month.
The Chapter 11 filing occurred about eight weeks after a lender moved to foreclose on the house the couple share in San Antonio. The 4,575-square-foot property, featuring seven bathrooms, has been listed for sale for $1.4 million since March.
The bankruptcy also came a day before a scheduled court hearing at which investors in another ill-fated Padilla project planned to ask a Bexar County judge for help in collecting on a $3.7 million judgment against the Padillas, their sons and a family-owned company. The two sides disagree on whether the judgment is final.
Padilla faces 61/2 to about eight years in federal prison for making false statements to a bank regarding a loan on Tundra Village. The U.S. attorney's office, however, has indicated in court documents that they may urge U.S. District Court Judge Xavier Rodriguez to dispense a harsher sentence given the nature of Padilla's offense.
In a sentencing memorandum, U.S. Attorney John Murphy and Assistant U.S. Attorney James Blankinship wrote it was Padilla's custom to promote a development project, to lure investors, to obtain construction financing and then to steal portions of the money.
“Padilla intended to siphon off as much money as possible while performing as little as possible,” the prosecutors charge in the document. Tundra Village was built without proper approvals and infrastructure, they added.
The prosecutors calculate Padilla caused more than $13 million in combined losses to two banks, more than 30 investors and other parties. However, the prosecutors say they still are trying to reach all potential victims to determine the actual loss and restitution.
Rodriguez this month agreed to postpone Padilla's Oct. 6 sentencing until Nov. 17 to give prosecutors more time to contact victims.
Adam Cortez, Padilla's lawyer, said the loss related to Padilla's guilty plea is nowhere near $13 million. As part of Padilla's plea, the government agreed to dismiss three counts of bank fraud and two other charges of making false statements to a lender.
“He got behind on the project, and (the lender) lost money because he couldn't finish the project,” Cortez said.
Padilla must pay restitution under his plea, but Cortez said prosecutors know Padilla doesn't have the assets to make $13 million in restitution.
In their bankruptcy petition, Padilla and his wife, Maria del Rosario Padilla, checked a box listing assets in the range of $500,001 to $1 million. They also reported liabilities in the same range.
The petition didn't include a detailed list of the Padillas' assets and liabilities, so it's not clear why their assets wouldn't be higher given their residence at 8815 Mount Arcadia is listed for sale for $1.4 million. Property records show the house is in Maria del Rosario Padilla's name.
The bankruptcy was prompted by a July foreclosure action on the house by Bank of America, Cortez said. A bankruptcy court filing this week noted there also are many lawsuits and liens pending against the Padillas.
In one of the suits, investors in a failed Padilla multifamily project in Live Oak charged last month that they believe the Padillas are taking steps to avoid paying a $3.7 judgment against them.
The investors allege the couple is asking tenants in some of the Padillas' rental properties to pay in cash as a way to “subvert paying the judgment,” according to the court filing.
Cortez denied the charge. “If they have assets, why don't they make their house payment?” he said.
Regardless, Cortez noted, the bankruptcy suspends any legal actions against the Padillas. Cortez is not representing the Padillas in the bankruptcy.
Read more: http://www.mysanantonio.com/business/local/article/Troubled-developer-files-for-bankruptcy-660155.php#ixzz1Ae2tLCza
MAURO PADILLA has hit the TV NEWS and NEWSPAPER MEDIA several times!
SAN ANTONIO - It is the large graffiti, the busted out windows, and the damaged rooftops in a vacant subdivision that first catch your attention while driving along South Highway 16 in South Bexar County. "It's pretty much getting like an eye sore, because of all the graffiti that's going on," said neighbor Linda Sanchez. The tacky-looking subdivision was supposed to be Tundra Village Townhomes. There are 45 undeveloped 4-plexes on the property. They have been sitting vacant for several years. News 4 WOAI first told viewers about property in October 2009. That is when the FBI arrested the builder, Mauro Padilla III, on charges of bank fraud. Padilla's lawyer, Adam Cortez, told News 4 WOAI the contractor's company lost the property in bankruptcy last year. Bexar County engineers say the unfinished area was developed without approved plats, without utility lines and without roads. News 4 WOAI I spoke with a South Texas man named Ruben Cazares, who told us he purchased the property from the bank in November.
Cazares says he's hired an engineering firm to research the property, and he has plans to get the townhome community back on the tax roles. When News 4 WOAI asked Cazares if he had concerns about the vandalism on the site, he told us "no." He says the vandalism is expected when properties sit vacant for so long. Neighbors say they just want to see the area cleaned up. "Hopefully, get somebody to come fix it up and have people move in, instead of leaving it there like an eyesore," said Sanchez. The county engineer says her office will be happy to work with the ultimate property owner on getting the issue resolved and bringing the subdivision into compliance. Workers in the Bexar County Code Compliance office say they have not received any complaints of vandalism at Tundra Village Townhomes.
http://www.kens5.com
Local man says he's not guilty of embezzling millions
by Stacia Willson / KENS 5
Posted on October 9, 2009 at 7:17 PM
Updated Tuesday, Oct 27 at 3:42 PM
Video
Mauro Padilla promised a neighborhood of brand new homes near the Toyota plant. But investigators say he abandoned the project and embezzled millions of dollars from the bank.
He promised a neighborhood of brand new homes near the Toyota plant. But instead investigators say he abandoned the project and embezzled millions of dollars from the bank.
Friday 55-year-old Mauro Padilla III faced multiple counts of bank fraud, but he claims he is innocent.
Along Hwy. 16, just south of the Toyota plant, you can find row after row of four-plexes. At one time the area showed potential for growth. But now all 37 buildings in Tundra Village have been abandoned. The bank is out the cash, and the federal government says Padilla is responsible. According to the court docket, from 2007 to 2009 Padilla borrowed more than $8 milllion from First National Bank, and never paid it back.
The contractor and real estate developer promised to build in the area, but after the walls went up, everything else went downhill. Adam Cortez, Padilla's attorney, said the project stalled for several reasons, one of which was the uncertainty of the Toyota plant. Meanwhile, the bank was uncertain about getting their money back. The FBI got involved, and now Padilla is in trouble with the law. Cortez claims the money his client borrowed will somehow resurface. Padilla bonded out Friday morning. He is due back in court within the next few months, when he will face up to 30 years in federal prison and a fine not to exceed $1 million.
http://www.foxsanantonio.com
The following is an archived video story. The text content of that video story is available below for reference. The original video has been deleted and is no longer available.
Local Business Man Waives Plea Deal
A San Antonio builder accused of bank fraud waives a plea deal in court today. Mauro Padilla will now head to trial next month. We first told you about Padilla in 2008. He was supposed to build the Tundra Village off Highway 16 south near the Toyota plant, but never finished the job. In October, a grand jury indicted him on six counts, including bank fraud. Prosecutors say Padilla lied about the project and kept the money. His trial begins March 1st.
Posted By: Sandra Ibarra
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