There are stories out there about home builder mortgage companies. We had a client who emotionally settled into a house here in the Las Vegas valley. It was a great deal for them but they had one problem: they didn't quite qualify for the loan they needed and didn't want to pay for a higher interest loan. The builder said they would take care of it and that everything would close fine.
The couple returned to Europe planning to follow the instructions of the lender to finalize the deal. When the docs arrived they took them to a lawyer and he flagged about 10 items inconsistent with what they were planning on. It turns out that they had sent the docs for a completely different program. When they inquired they were told via email to go ahead and sign anyway and the lender would just cross stuff out to make the fixes. Well, we all knew that wasn't going to happen so the deal fell apart. The clients were furious and wanted a lawsuit. They were talked out of it and set up another trip to come out to make a purchase.
Now, don't get me wrong, here. I appreciate that new home builders are in the business to move their homes. As Realtors we appreciate a smooth, quick close. However, we also appreciate an honest close. MSNBC wrote an article about some of the home builder lending practices. They even suggest that they are partly responsible for many of the problems the lending industry is seeing which affects, directly or indirectly, many other markets in the US.
I won't be surprised if investigations are instigated and regulations enforced for some of the practices that have occurred.
