Real Estate

Pacific Palisades Owners Sue Over $18M Foreclosure, Claim Unlawful Loan Transfer

Weingartens sue Kwala over $18M Pacific Palisades foreclosure, challenging $6.6M loan transfer legality.

By Doug Elli

6/10, 11:10 EDT
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Key Takeaway

  • Pacific Panorama LLC is suing Kwala, alleging wrongful foreclosure on a $18 million Pacific Palisades property at 17000 West Sunset Boulevard.
  • The lawsuit claims Wells Fargo unlawfully transferred the $6.6 million loan to Kwala without a California real estate brokerage license.
  • This legal battle adds another chapter to the decade-long dispute over the property's ownership and debt, dating back to 2014.

Foreclosure Dispute in Pacific Palisades

The ongoing legal battle over a prime residential site in Pacific Palisades has taken a new turn as Shlomy and Revital Weingarten, associated with Pacific Panorama LLC, have filed a lawsuit against Kwala, a Nevada-based lender. The Weingartens claim that Kwala wrongfully foreclosed on their property at 17000 West Sunset Boulevard. This lawsuit adds another chapter to a decade-long litigation saga over the two-acre site, which was listed for sale at $18 million in 2022. The Weingartens allege that Kwala unlawfully took over the loan from Wells Fargo without the necessary California real estate brokerage license, a claim that Kwala's attorney, Michael Dicecca, has dismissed as frivolous.

Complex History of Ownership and Debt

The ownership and debt history of the Pacific Palisades site is intricate. Pacific Panorama acquired the title in 2008 from investor Gregg Corlyn, who had taken out loans from Wells Fargo starting in 2007, eventually totaling $6.6 million. When Corlyn faced a notice of default, Pacific Panorama, despite not assuming the loans, faced foreclosure. Kwala, which has owned an adjacent property since 2014, bought the loan from Wells Fargo in 2022. The lawsuit hinges on the legality of this transfer and subsequent foreclosure, with Pacific Panorama arguing that Wells Fargo lacked the proper licensing to transfer the loan to a private investor like Kwala.

Broader Implications for Real Estate and Lending Practices

This case highlights significant issues in real estate and lending practices, particularly the transfer of loans between financial institutions and private investors. The Weingartens' claim that such transfers require a California real estate brokerage license if the recipient is a private investor could have broader implications for similar transactions. If the court sides with Pacific Panorama, it could set a precedent affecting how loans are transferred and foreclosed upon, potentially leading to stricter regulatory oversight and compliance requirements for financial institutions and private investors alike.

Legal Perspectives and Market Reactions

From a legal standpoint, the case presents a complex interplay of property rights, lending practices, and regulatory compliance. Kwala's attorney, Michael Dicecca, has labeled the lawsuit as baseless, but the Weingartens' allegations raise questions about the legitimacy of loan transfers and foreclosures. This dispute also reflects broader market dynamics, where high-value properties and significant debt loads often lead to protracted legal battles. The outcome of this case could influence investor confidence and lending practices in the real estate market, particularly in high-value areas like Pacific Palisades.

Management Quotes

  • Michael Dicecca, Attorney with Tuchman, Jhun and Dicecca representing Kwala:

    "It’s a frivolous lawsuit that has no basis in fact or in law."