I have also been thinking about buying these bonds. Given changes in RE market, I’d guess that Del Sur is pretty unlikely to be built out in 2009.
If I’m reading the Bondholders Risks section of the 2006 offering document for these bonds which is available at http://emma.msrb.org, foreclosures primarily result in delays in receipt of taxes BUT taxes due while payer is actually in bankruptcy can be lost and new buyer/owner is only liable for a)taxes owed by seller prior to sellers bankruptcy, and b)taxes starting with date of new buyers ownership. It also appears that another foreclosure worry is if bank/lender takes over property and then lender is later taken over by FDIC, FDIC’s stated policy is that they will not pay MR taxes under FDIC’s federal immunity.
My biggest worry is that developer or one or more of the involved builders Standard Pacific, Shea, Laing, Lyon, etc. may get into enough trouble that they stop paying MR taxes on lots they own, or will go bankrupt before they can finish building out their portions of the development. Do we really know that Black Mountain LLC is in good shape financially?
