Loyola Federal Savings and Loan has foreclosed on the Cloisters at Charles new-home community at Charles Street and Bellona Avenue in Baltimore County, and scheduled a Sept. 25 auction of the undeveloped lots and a handful of unsold homes.
The community of so-called cluster homes, unusually large town houses, has been plagued by slow sales and the weak economy. The Cloisters at Charles' asking prices, many of which are in the $400,000 range, put it in one of the hardest-hit sectors of the real estate market.
"The job has been slow since the end of 1990," said James McAveney, chief financial officer of Loyola Capital Corp., the thrift's parent company. "It's unfortunate because this is one of the gemstones of the Faust Homes operation."
Mr. McAveney said the savings and loan would bid for the property at the auction up to the amount of the loan, which is about $6.5 million including interest. He said it was likely that the bank would own the property after the auction, rather than another bidder.
"This is not a catastrophe," he said. "It's very prime real estate and there's a lot of opportunity there for us."
Thomas J. Faust, president of the Baltimore County-based builder, had no comment.
The company could stop the auction by filing for protection from creditors under the U.S. Bankruptcy Code, but Mr. Faust would not comment on whether that was likely.