Archive for September, 2007
Buying a new construction can be dangerous. Generally a new condo is contracted to be purchased for a set price, which can prove dangerous if the home prices plummet before the home is even completed.
Two large condo groups are currently the target of a large class action lawsuit taking place in Florida. Within the suits, the buyers allege that they were misled regarding the outrageous monthly HOA community fees, and suffered long construction delays.
Law.com references the case as follows:
They claim Related raised the condo association’s operating budget by more than 65 percent between contract signings and completion. The monthly maintenance fee for Meyerovich’s unit jumped from the initial estimate of $748 to $1,240, according to Cooper.
Under state law, buyers are allowed to cancel condo purchase contracts if “material and adverse” changes are made to condo documents filed with the state. But state regulators and developer’s attorneys disagree about whether higher maintenance fees open the door on rescission.
Did I read that right? More than $1200 a month JUST in HOA fees? That’s ridiculous, nuts, highway robbery, insanity…I lack the adjectives to describe a home owner’s community fee that exceeds my monthly mortgage.
In a hilarious message on their website, Community Lending, a lender, has announced:
It has been proven that in today’s very disruptive market, volume is equal to risk. And that risk continues to escalate through guideline tightening, aggressive collateral review and due diligence processes that border on full QA audits. ComUnity Lending has decided to mitigate the risk of the market by reducing our volume and moving to the sidelines while we wait for sanity to return to the market. We plan on a short period of rest and re-structuring, after which we will re-enter the business aggressively. We are committed to this business and look forward to seeing our way through this turbulent time.
We will be retaining two production offices in California and a core group of dedicated staff at our Central Support office in Morgan Hill. Effective September 1, 2007, ComUnity Lending, Inc. will move all loans to these two offices and we will lock only through these two offices. We will be working with friendly competitors to find homes for our Retail offices and other production units.
That about sums it up. Market is no longer sane, and lenders have decided that in order to mitigate risks blah blah blah they need to stop loaning altogether.