FORT MYERS, Fla. — A court motion filed in Colorado involving construction loans made by the Fort Collins, Colorado-based Norlarco Credit Union and the Ann Arbor, Michigan based Huron River Area Credit Union to fund homes built by First Home, a subsidiary of Hovnanian has forced a mediation meeting today. The NCUA, which placed both CUs into conservatorship, has been negotiating with the builder in an effort to stem losses to the two CUs.

Some 20 lawsuits have already been filed against D'Alessandro & Woodyard, the real estate firm that handled many of the deals. Those lawsuits will move forward despite the death of D'Alessandro, who recently drowned in a kayak accident off the coast of New Jersey. Other lawsuits have been filed against the Millionaire's University, a real estate investment advisor/broker in Cape Coral.

Norlarco funded over 1,000 homes in Lee County, Fla., in Lehigh Acres and Cape Coral for a total of $238.4 million. Hovnanian has tried to unload its backlog of homes in California and Florida by discounting them, but sales have not gone well, as the company posted a third consecutive loss for the quarter. It still holds 1,787 homes worth $496 million in Lee County.