Az Foreclosures (Phoenix: mortgage, loans, relocate)

[Bill-]

Originally Posted by MotleyCrew

My two cents. If I had a home with serious defects I would have continued to make the payments on time. You have other recourses and it is not an excuse to stiff the bank. You are not renting, so withholding payment is your demise.

This is exactly right. There is recourse available throught the State Registrar of Contractors, going after the home inspectors error and ommisions insurance, suing the builder etc. Not paying on the house in the meantime is just going to result in trashing your credit rating. I have a hunch we're not getting the whole story here.......

[mazy]

I am NOT in foreclosure!!!!!!! I just asked the question because I wonder because I am frustrated but we are not going to RUIN our credit!!!!!!!!!!!!!!!!!!!!!!! We will continue to fight but it has been almost 2 years and I wonder how many people give up!!!!!!!!!!!

[Bummer]

Originally Posted by mazy

I am NOT in foreclosure!!!!!!! I just asked the question because I wonder because I am frustrated but we are not going to RUIN our credit!!!!!!!!!!!!!!!!!!!!!!! We will continue to fight but it has been almost 2 years and I wonder how many people give up!!!!!!!!!!!

Simple answer to that question, mazy . . . LOTS!

However, most regret it afterward for many many years!

Sounds like you are taking the correct approach and NOT the easy way out!

[Stumblina]

Originally Posted by MotleyCrew

My two cents. If I had a home with serious defects I would have continued to make the payments on time. You have other recourses and it is not an excuse to stiff the bank. You are not renting, so withholding payment is your demise.

Oh so true. Mazy, I can't see your initial question as being valid. Who would let their home go into foreclosure because of defects? If it goes into foreclosure, it's because they could not afford the home in the first place. If you haven't done so already, you need to contact a good commericial litigator. I see serious breach of contract issues on the part of your builder in your situation. If these defects can be proved by an inspector, and your contract can defend the allegations, you shouldn't have any problem suing your builder.

[ron17571]

I thought the post would have to do with all the people buying beyond there means.Sorry to hear of your situation,i think the houses are slapped together by illegal aliens with no real skills.

[Gretchen B]

mazy - did the builder not provide a builder's warranty? Most of those are for at least 2 years, and many cover the home for 10 years for structural issues. SO important to purchase from a reputable builder who offers a good warranty and wants to maintain a good reputation. Motley Crew mentioned pursuing this through Registrar of Contractors. Also, builders carry insurance to cover them for these kinds of things.

As far as foreclosures because builders built shoddy homes - no, I don't think so. However, builders were very quick to entice (should I say coerce) buyers in to using "their lender". Many of the builders' lenders put people in the builders' homes by using reverse amort ARM loans and other questionable lending practices. I've heard of some people that were paying $300/mo house payments on $700,000 homes, and were clueless that their mortgage would escalate to $4,000+ in the 3rd year of the loan. So what do they do? Try to sell their home. Unfortunately, the home is now worth only $450,000. What else can they do but walk?

[Bummer]

Originally Posted by Gretchen B

As far as foreclosures because builders built shoddy homes - no, I don't think so. However, builders were very quick to entice (should I say coerce) buyers in to using "their lender". Many of the builders' lenders put people in the builders' homes by using reverse amort ARM loans and other questionable lending practices. I've heard of some people that were paying $300/mo house payments on $700,000 homes, and were clueless that their mortgage would escalate to $4,000+ in the 3rd year of the loan. So what do they do? Try to sell their home. Unfortunately, the home is now worth only $450,000. What else can they do but walk?

Sadly, Gretchen, your weird loan example may be more common than most people are aware.

However, anyone with half a brain should know there is no such thing as a $700k loan with monthly payments of $300. I agree walking is probably the easiest way out but they have absolutely no one to blame but themselves for having their heads in the clouds (or someplace further south) and not reading before signing.

[Gretchen B]

Originally Posted by Bummer

Sadly, Gretchen, your weird loan example may be more common than most people are aware.

However, anyone with half a brain should know there is no such thing as a $700k loan with monthly payments of $300. I agree walking is probably the easiest way out but they have absolutely no one to blame but themselves for having their heads in the clouds (or someplace further south) and not reading before signing.

I agree Bummer - the responsibility must be shared by the borrower. From one example I know of personally - a very naive first time homebuyer with excellent credit (the lenders LOVE those). You would'a thought he'd have been smarter than that, but you can't imagine home many people are clueless about such things. And some of these builders and their lenders are less than upfront with an unrepresented buyer. They cut most of us realtors out the equation every chance they could. "No reason for you (the buyer) to use an agent. We handle all the paperwork . . . " (Somewhat like the wolf in Little Red Riding Hood - Buyer Beware!)

[odinloki1]

Here's an idea that I like:

All these companies that promote loans that prey on people when there is a much higher rate of foreclosure for that type of loan should have their asssets seized. Why blame just the people that took the loan, someone came up with it knowing that many people would not be able to make payments and they would default, but people would take them because they wanted to own a home and not be at the mercy of corrupt lazy landlords. All of these companies that prey on people are just as guilty, but for some reason we do not want to blame them.

Here's what will really get me though, my fiance and I got a house about 9 months ago because we're going to be here for at least 2-3 years but want to move by 2010, the best we could get for a nice area was $200k at $1600 a month a normal mortgage. We are going to lose money because of the glut of houses on the market, I tried to do things the right way and not fall for those subprime loans and I will still end up losing money because of this bubble bursting.

Here's an idea for a federal law

(median house price for an area) / 6 = minimum yearly salary for any individual.

Something like this could guarantee that people could OWN a place to live and our neighborhoods would be better taken care of instead of all of these rentals. Plus people wouldn't see value increase by 100k a year or anything, but they wouldn't lose tons of value when a bubble bursts. People on the lower income end wouldn't own a huge mansion, but they could own something.

[Ozark Nana]

I don't agree with everyone wanting to get the government involved in issues that are personal choices by people....we are so heavily regulated, watched, taxed, fined and ticketed now! People need to start taking responsibility for their own actions! I have a very difficult time feeling pity for people that believe anything someone tells them without doing their research...you NEVER believe a builder, you NEVER use THEIR Inspectors, you always get your OWN Inspector no matter if the house is 10 years old or 10 minutes old....don't sign anything without having someone look at it if your unsure...anyone that tries to pressure you into signing something that your unsure of...walk away! Scrutinize and warranty's, guarantees, implied directives anything you see in writing QUESTION it and then take it to a Lawyer or a Paralegal to look over, or a trusted friend that has experience in those matters....if you don't know....FIND OUT! Protect yourselves.... and if you choose not to, well, that's YOUR choice...don't get the government involved because you made a mistake...and if it sounds to good to be true it probably is!

O.Nana