VOL. 127 | NO. 134 | Wednesday, July 11, 2012
Herenton Home Listed as Short Sale
By Sarah Baker
Former Memphis Mayor Willie W. Herenton’s home in Banneker Estates is on the market as a short sale.
The single-family home on Horn Lake Road has been on the market for more than 160 days. The house in the McKellar-Whitehaven-Levi PD neighborhood is listed for $369,900 with B.J. Worthy with RE/MAX on Track.
The house was originally listed as a short sale with Worthy in January at $399,000, and was reduced by $29,100 in March.
“When you have an owner who is motivated to go, then they’re willing to do whatever we suggest to get rid of it,” Worthy said, noting that a third of Shelby County homes on the market are short sales. “The thing is, there are some updates that the owner decided he wasn’t going to do, and so he’s letting it go for less so that the next person can come and they won’t mind doing it.”
A short sale is a house that is being sold for less than is owed against it. The buyer negotiates with the mortgage lender to take less than the outstanding remaining balance for the lender to release the lien and allow it to be sold.
The short sale process is used as an alternative to a foreclosure sale because it lessens further fees and costs for both parties. And banks are more inclined to negotiate short sales at the present than ever before, following the recent $25 billion U.S. Attorney General settlement with the nation’s five major lenders.
Herenton borrowed $706,647.11 in June 2008 from Wells Fargo Financial Tennessee I LLC on a 30-year mortgage for the property, according to the Shelby County Register of Deeds.
While terms of the transaction were not disclosed, the loan is still outstanding. The original principal balance four years ago is not quite twice as much as the house’s current listing price of $369,900.
In a charter school application that Herenton filed with the state in April, he listed his address as the Horn Lake Road property. It is unclear if the former mayor still resides in the house.
The Daily News was unable to reach Herenton for comment on the transaction.
Meanwhile, the Internal Revenue Service in January filed a $60,010.70 federal tax lien against Herenton, demanding payment for unpaid income taxes for 2009 ($14,343.52) and 2010 ($45,667.18).
In May, the IRS filed a federal tax release for a home on Dubois Drive, a neighboring property of Herenton’s home in Banneker Estates. A Certificate of Discharge released the lien on the property, but did not release the general lien against Herenton.
It was also in May – four months after the IRS took action on Herenton’s $60,010.70 delinquent taxes – that Herenton sold the Dubois property for $240,000 to Anthony Coleman and Marvia M. Balfour-Coleman. The property was quitclaimed from Herenton Investment Co. (an entity of which Herenton was listed as president) to Herenton as an individual in June 2008.
The Dubois house was one of several that Herenton has owned or still owns. The Shelby County Assessor of Property shows he owns homes in his name on Barton and Dubois, as well as the home on Horn Lake that is up for short sale.
Built in 1992, Herenton’s home sits on 4.7 acres in Memphis’ 38109 Westwood ZIP code. Its 2012 appraisal from the Assessor is $593,100.
Annual county/city taxes on the 6,582-square-foot house are $5,961 and $4,728, respectively.
The property went into Herenton’s possession in June 1990 in a warranty deed from Jessie Lee Franklin. He bought the undeveloped property for $32,760 in April 1991, shortly before he was elected mayor.
At the time, Herenton said his goal was to build upscale residential housing in an area of the city that hadn’t had such new housing before. He also said it was an attempt by him to counter the eastward push of new housing development that was in full bloom at the time.
He acknowledged the Banneker Estates development was a financial risk.
In July 1991, a $267,000 building permit was filed to “erect (a) new dwelling with three-car garage” at the Horn Lake house, listing Herenton as the property owner and Harold E. Buehler Sr. as the general contractor.
The two-story property, located in a gated community, contains 12 rooms, five of which are bedrooms, according to the Multiple Listing Service.
Property features include an entry hall, three fireplaces, two wet bars, separate living and dining rooms, a den/great room, a breakfast bar and separate breakfast room, a keeping/hearth room, a library/study, an office, an exercise room, a sitting room, a loft/balcony, a powder/dressing room, a “man cave” and in-law quarters.
Worthy has had “a lot of interest” in the house, which she said, “has all of the bells and the whistles.”
“I’ve had two couples from California and I might be getting an offer any day on it,” Worthy said. “I know I’ve got it priced right, it’s on almost five acres, so it’s a good deal for somebody.”
Senior reporter Bill Dries contributed to this report.