Maryland New Home Rules Could Change After I-Team Investigation (North Beach: real estate, loan)

[justtitans]

Maryland New Home Rules Could Change After I-Team Investigation | NBC4 Washington

In December, the News4 I-Team showed how viewers like Tarshia Brown lost their entire down payment when they tried to buy a new home in Prince George’s County from one the nation’s largest homebuilders.


“He said, ‘You’re not getting your money back,’” Tarshia said about her experience. She lost $52,000 after she signed the standard, but complicated, contract, allowing the homebuilder to seize her down payment after she lost her financing.


The I-Team showed the contract to real estate attorney and former state Del. Aisha Braveboy, who represented the district where News4 viewers live. She said it’s not just the contract that’s problematic, it’s the actual law.

Sen. Muse, who is married to NBC4 anchor Pat Lawson Muse, said he was outraged when the I-Team investigation found one company reported it brought in more than $125 million in seized down payments.


“People in good faith, who didn't know, signed for this, thinking it was just a process for the American dream,” Muse said. “They were taken advantage of."


Muse is asking the Maryland attorney general to launch an investigation into what the I-Team found and introduced legislation to change how builders are allowed to sell new homes in Maryland.

[kcmo]

Wow, that is messed up. How can a large company like that get away with taking people's life savings and actually be okay with the practice? People who do this **** to people need to go to jail along side the thugs that rob people on the streets.

[North Beach Person]

I'm cranky today so I'm going to be a **** disturber.

Why do these reports always make it seem that stuff like this only happens in Prince George's County?


As a note, forfeiture of deposit for inability to secure funding has been standard for decades in many areas, whether for new construction or resales. That's why you write in the contract verbiage that gets you your deposit back if you can't secure a loan.

I'm just a stupid old white guy and even I know that.

[kcmo]

Originally Posted by North Beach Person

I'm cranky today so I'm going to be a **** disturber.

Why do these reports always make it seem that stuff like this only happens in Prince George's County?


As a note, forfeiture of deposit for inability to secure funding has been standard for decades in many areas, whether for new construction or resales. That's why you write in the contract verbiage that gets you your deposit back if you can't secure a loan.

I'm just a stupid old white guy and even I know that.

Yes, but it's obvious they are taking advantage of people. Why in the world would a home builder collect a 20k deposit on a new home without pre-approval? I'm sure they assure the buyer that the deposit is safe or just don't mention anything at all about the risk involved.

[justtitans]

Originally Posted by kcmo

Yes, but it's obvious they are taking advantage of people. Why in the world would a home builder collect a 20k deposit on a new home without pre-approval? I'm sure they assure the buyer that the deposit is safe or just don't mention anything at all about the risk involved.

Better question, why would people sign off on documentation for a deposit for paperwork that they do not understand? Get a lawyer and have him/her read over it. It's worth it in the long run. The only way you stop people from taking advantage of you is to obtain knowledge to know how to counter it.

[Missingatlanta]

Originally Posted by North Beach Person

I'm cranky today so I'm going to be a **** disturber.

Why do these reports always make it seem that stuff like this only happens in Prince George's County?


As a note, forfeiture of deposit for inability to secure funding has been standard for decades in many areas, whether for new construction or resales. That's why you write in the contract verbiage that gets you your deposit back if you can't secure a loan.

I'm just a stupid old white guy and even I know that.

The second link says a guy in Loundon County, VA lost 20k with Toll Brothers. I hope these people get their money back.

[adelphi_sky]

Originally Posted by justtitans

Better question, why would people sign off on documentation for a deposit for paperwork that they do not understand? Get a lawyer and have him/her read over it. It's worth it in the long run. The only way you stop people from taking advantage of you is to obtain knowledge to know how to counter it.

Victim blaming again. To be honest, I had no idea that this was possible. And I'm sure many who saw the piece didn't either or else it wouldn't be a problem. I was lucky in that I got a loan approval first when I bought my first house at 24 years of age, I had no idea there was a way I could lose my deposit. And I was college educated. And they DON'T teach you that in the class for first-time home buyers. And not everyone can afford a lawyer. That's not the answer. The answer is to make sure there are laws so you don't need a lawyer for every single purchase you make in life. That's not practical for 99% of the population.

Why don't we focus on getting a law passed that protects buyers instead of blaming them? Again, there is an attitude that says to hell with good faith business practices as along as you can get away with it? Anyone who is not outraged that this type of situation is possible advocates taking advantage of people with no remorse.

I'm tired of the "It didn't happen to me so other people are dumb and deserve what they get." attitude people have. The simple narrative should be, there should be a law to protect buyers from losing their entire deposit if they don't get financing. In addition, the law should force the seller to disclose ANY and ALL fees associated with the contract and have that piece notarized that they in fact disclosed those fees verbally and in writing. Simple. I'm pretty sure that if someone thought they could lose $50k to a home builder just because they got turned down by a bank, the contract would have never been signed.

Yes, I agree, in a perfect world, people should know what they are getting into. But just because there is a loophole in a law doesn't mean it's okay to blatantly rob people of their hard earned savings just because you can.

[justtitans]

Originally Posted by adelphi_sky

Victim blaming again. To be honest, I had no idea that this was possible. And I'm sure many who saw the piece didn't either or else it wouldn't be a problem. I was lucky in that I got a loan approval first when I bought my first house at 24 years of age, I had no idea there was a way I could lose my deposit. And I was college educated. And they DON'T teach you that in the class for first-time home buyers. And not everyone can afford a lawyer. That's not the answer. The answer is to make sure there are laws so you don't need a lawyer for every single purchase you make in life. That's not practical for 99% of the population.

Why don't we focus on getting a law passed that protects buyers instead of blaming them? Again, there is an attitude that says to hell with good faith business practices as along as you can get away with it? Anyone who is not outraged that this type of situation is possible advocates taking advantage of people with no remorse.

I'm tired of the "It didn't happen to me so other people are dumb and deserve what they get." attitude people have. The simple narrative should be, there should be a law to protect buyers from losing their entire deposit if they don't get financing. In addition, the law should force the seller to disclose ANY and ALL fees associated with the contract and have that piece notarized that they in fact disclosed those fees verbally and in writing. Simple. I'm pretty sure that if someone thought they could lose $50k to a home builder just because they got turned down by a bank, the contract would have never been signed.

Yes, I agree, in a perfect world, people should know what they are getting into. But just because there is a loophole in a law doesn't mean it's okay to blatantly rob people of their hard earned savings just because you can.

I'm not blaming the victim, I am stating how you can avoid these situations. You can't assume just because someone throws a document in your face that you are going to be protected. You need to do research and make sure that this is the right idea. If you can't get a lawyer, at least get a realtor. Yes it is costly, but they are rarely involved in purchases of new homes, which leaves the buyer vulnerable to things like this. The buyers need to put some experts on their side.

And no they don't teach this in first-time home buyer classes, but I doubt many would take a class like that for a new home purchase given the process is much different. There is no equivalent so these buyers are targeted because there isn't as many loopholes. You can however lose your earnest money deposit in a similar situation. The difference is, the buyers would have likely have been vetted more before going through the deposit process.

You can't be dependent on the government to protect you from every single thing. If you are dealing with your life savings, you have to be smart with your money, regardless of what the laws are. What if these developers come up with another loophole to get your money? Are you going to depend on the government again? Preparing yourself doesn't hurt does it?

[UrbanScholar]

Originally Posted by North Beach Person

I'm cranky today so I'm going to be a **** disturber.

Why do these reports always make it seem that stuff like this only happens in Prince George's County?


As a note, forfeiture of deposit for inability to secure funding has been standard for decades in many areas, whether for new construction or resales. That's why you write in the contract verbiage that gets you your deposit back if you can't secure a loan.

I'm just a stupid old white guy and even I know that.

Good Point. It also sounds like they didn't have a good real estate agent. That's one of the first things that was explained to me when I was buying.

[justtitans]

Originally Posted by UrbanScholar

Good Point. It also sounds like they didn't have a good real estate agent. That's one of the first things that was explained to me when I was buying.

Most people don't get real estate agents when they buy new construction homes, which makes it easier to be duped. The developers don't like dealing with them and I am sure most people don't like the expense of paying someone to go see a home they can see themselves, but their expertise could really help.