Posted on 05/04/2007 7:06:40 AM PDT by sportutegrl
In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them.
Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits.
For some builders, the disputes are contributing to cancellation rates as high as 30% and writedowns in some markets. "People will go to great lengths to get out of a legally binding transaction," said Larry Sorsby, chief financial officer of Hovnanian Enterprises Inc. "They were willing to ride the real-estate boom on the way up, but some are not willing to ride it on the way down."
Newly constructed homes make up only about 15% of total home sales. But a wave of building helped fuel the run-up in housing prices during the real-estate boom, especially in Florida and California. As the market started turning last year, prices on new homes and condos quickly stalled, then began dropping. That gave skittish buyers time to get cold feet.
Florida, a magnet for housing speculators in the boom, is ground zero for such disputes. The state long has been a boon to housing attorneys, some of whom are now filing lawsuits against developers.
(Excerpt) Read more at online.wsj.com ...
An administrative assistant in Broward County government, Ms. Sewell said she and her husband, a carpenter, earned $90,000 a year at the time of the deal and never should have qualified for their mortgages. She also claims a real-estate firm involved in the deal promised that it would find them tenants to rent out the houses. But the renters never materialized, her houses are vacant, and two of her loans are in foreclosure.
Buying 3 houses on a $90,000 salary is an investment, (and a bad one). You don't get your money back just because you can't make a profit. You win some, you lose some.
All I want is a guarantee that my investments will always increase in value, never depreciate, and that in the event of financial difficulties, I will not be held to account for any past stupidity. That’s all I want.
What a hypocrite. Why didn't they complain about qualifying when she and her husband were approved for the deal?
rampant speculation generally preceeds a market downturn.
When the pool secretary is buying nasdaq computer stocks online on margin, it’s time to sell short.
She’s the kind who would sue a casino for not stopping her from placing a wager. ;)
It isn't the builders fault if you were too stupid to read the contract, or to get someone else to read it for you if you couldn't understand it.
“Buying 3 houses on a $90,000 salary is an investment,...”
BWAAHAAHAAHAA@!
AND she’s a government employee. What a moron. Lehigh Acres?
BWAAHAAHAAHAA@!
Chuckie Schumer will bail her out.
A better question is, why did they even apply for three mortgages? If they did it as an investment, they should have known that investments sometimes go bad. Of course, liberals never want to accept responsibility for their bad decisions. It is always someone else's fault.
The “no consequences” generation buys homes.
You have just perfectly characterized exactly what sizable majorities of the American population (and electorate) want ensured for them by their government...sometimes on different topics than this, but the exact same concepts.
Three mortgages that she had no chance of paying back.
Sounds like a predatory borrower to me.
Maybe we should pass a law against predatory borrowing!
I guess these articles are supposed to make us feel symphathetic towards these idiotic homebuyers. I don’t feel sorry for some fool that makes $90,000/year and buys three houses.
I think that program will only be for owner occupied homes.
Hmmm, I thought more supply meant lower prices. OTOH, I remember looking at MLS during that time and there was almost nothing for sale. Now there is ten times that amount.
Maybe some FReeper historians can help me here.
AS I read things from the 20s, FL property was a very hot speculative ‘investment’ - and as the economy slowed, the land market fell apart, forcing many to cash in stocks.
This land collapse in turn was the genesis of the stock market collapse or at least a harbinger. Comments?
And the libs in Congress are exposing the continuing the “no consequences” mindset -
Shumer wants to bail out folks who can’t pay their mortgages with OUR MONEY.
It’s just a foreign concept to them that those who make the decisions should reap the consequences (or rewards) for those decisions.
What would be interesting to see if these borrowers told the truth on their respective loan applications in regards to if the properties were owner occupied or non-owner occupied. It would also be interesting to see if the loan applications acknowledged the other properties they were trying to buy simultaneously. This is where the real fraud is. Most of these idiots who buy multiple properties actually gave two thoughts to actually having to repay these loans to begin with. The MO was to buy these properties and sell them the same day they officially purchased these homes for a huge profit. Now that property values are finally returning to mean and sanity is making a comeback, these idiots want to bail out. I have no sympathy for these people, they are not victims. You signed the contract, pay up.
I know of this bridge if you’re interested! ;-)
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