LandCap JV to buy Wachovia loans: report

(Reuters) - A joint venture created by LandCap Partners is buying $40 million of troubled land and construction loans from Wachovia Corp The Wall Street Journal said.

LandCap, a residential-land company headed by real-estate veteran Jeffrey Gault, has created a joint venture that will buy the loans which have a book value of $75 million to $80 million, the paper said citing people familiar with the deal.

The loans are to home developers and collateralized by 2,900 house lots, which are in varying stages of development, in states such as California, Arizona, Florida and Illinois, the paper said.

The paper said many of the loans are in some form of distress because of delinquent payments or plunging values of the collateral.

The venture plans to sell foreclosed property to other home builders, the paper said.

"We get it off their balance sheet, and we take on the management duties," Gault, was quoted by the paper as saying.

Wachovia and LandCap could not be immediately reached for comment. (Reporting by Ajay Kamalakaran in Bangalore)