Chicago Bulls forward Patrick Williams was hit this month with a foreclosure on a nearly $4 million loan he used to buy a Gold Coast condo last summer.
But it’s not what you think, according to a representative for the NBA player. The alleged loan default cited by Williams’ lender, JPMorgan Chase, was caused by what amounts to a paperwork error, the source said.
JPMorgan filed for foreclosure earlier this month after Williams allegedly failed to make monthly payments on the loan for more than four months, according to court records.
The 23-year-old NBA player was the fourth overall draft pick when he was selected by the Bulls in 2020. Last summer, he re-signed with the Bulls in a $90 million, 5-year contract, according to the NBA.
Williams last summer purchased the two-level Gold Coast condo at 65 East Goethe Street for $5.7 million, or $760 per square foot. The 7,500-square-foot condo has four bedrooms and five bathrooms, along with nearly 1,000 square feet of private outdoor space.
The sale was completed through a land trust in July, with the Chicago Tribune and public records later confirming Williams as the buyer.
Williams took out a mortgage on the property for just under $4 million on Aug. 14, property records show. He originally took the loan out with CrossCountry Mortgage, a national mortgage lender, but the debt was assigned to JPMorgan Chase Bank in December. A Williams representative blamed this transfer of the debt for the default that was eventually alleged. The source said those in charge of managing Williams’ borrowing entity did not receive notice of the lender substitution and as a result, payments weren’t sent to the right account.
The foreclosure complaint filed by JPMorgan claimed that Williams hadn’t made monthly payments on the loan as of Oct. 1, according to court records. The Williams representative said they wired a payment to bring the loan into compliance upon receiving a court summons.
The complaint was filed on Feb. 18, and the representative provided a reinstatement quote and proof of payment via wire transfer to show that the loan has come into compliance since then. It is unclear what will come of the foreclosure suit in the coming months, as it remains on the court docket for now; it could be dismissed if the borrower’s compliance is confirmed by the lender’s attorney.
It wouldn’t be the first time in recent months that owners of high-profile Chicago-area properties have appeared to fall into default on their loans when there turned out to be a problem other than financial distress.
In the commercial real estate sector, lender MassMutual in early October filed a $175 million foreclosure lawsuit against a joint venture of Related Midwest and the AFL-CIO’s Building Investment Trust that owns the apartment tower at 500 North Lake Shore Drive. The suit was voluntarily dismissed a few weeks later, after Related called the filing “premature.” But so far, the property doesn’t appear to have been refinanced, public records show, and it’s unclear if Related or its partner went into pocket to pay down the debt, or perhaps scored an extension of its maturity that the lender initially said was blown past without full repayment.
Furthermore, a $70 million loan owed by a venture of developer Warren Baker for a Lincoln Park property has for months been shown to be in special servicing — a designation usually reserved for a troubled deal within loan datasets.
But the underlying collateral is big box retail leased to Kohl’s and Best Buy at 2100 West Elston Avenue, and Baker has said that the label was mistakenly applied to the deal due to a mixup over how the property tax escrow was being collected. That appears to line up with what the lender has found out, and the special servicer is working to remove the debt from the concerning category.
While that false alarm would have raised some red flags as retail property is performing relatively well, another huge deal in the beleaguered office sector at 333 South Wabash Street appeared to be sinking last year when its landlord, a venture of developer Michael Shvo, was shown to be delinquent on a $240 million loan against the 1.2 million-square-foot tower. For a moment in April, the landlord was shown to be late by more than 30 days with a monthly payment.
Yet it was another nonstarter. Shvo told The Real Deal there was a technicality caused by a mixup within the complicated deal structure — previously, the deal had a lockbox reserve account activated due to the lender growing concerned with the amount of revenue the property brought in compared to the cost of debt service.
Although that issue was later rectified, the loan servicer still had to call Shvo’s firm, which instructed the lender to inform the borrower of any revenue shortfalls. The landlord promised to send any needed funds over. However, the loan is still watchlisted, a label lenders use when they begin to grow uneasy about the health of a loan.
The conundrums, with Williams’ serving as the latest example, make for reminders to borrowers to carefully observe their mortgage terms and communications from lenders, as even accidental defaults can rack up time and costs for both parties to sort out — especially when they lead to a lawsuit being filed.
An attorney for JPMorgan Chase did not respond to requests for comment regarding the Williams situation.
Williams has had a disappointing season on the court. In January, he was moved into a bench role after losing a starting forward spot to rookie Matas Buzelis. Earlier this month, Williams was sidelined for at least two weeks after receiving treatment for tendinosis in his right knee, and was scheduled to be evaluated again for a potential return to the court early next month. The Bulls explored trading Williams but were unable to make a deal before the NBA’s Feb. 6 trade deadline.
Williams moved into the home that drew the foreclosure complaint, located on the Gold Coast’s ritzy Goethe Street, from a rental unit on the highest floor of a 25-story River North building, the Tribune first reported last month.The Goethe Street condo building has housed some of Chicago’s priciest listings in recent years, such as the two-story condo of the late Jim Crown that was listed for $17.5 million last fall. Crown was the CEO of Henry Crown & Company and descendant of one of Chicago’s richest families.
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Chicago Bulls’ Patrick Williams drops $5.7M on Gold Coast condo