If this Little Broad Can Figure it Out, Why Can't They?

I must admit, Andrews comments hit it on the head. So for me a big "Ditto".

PS, I love that word. I picked it up from the Demi Moore and Patricj Swayze movie, Ghost.

Let's just leave them a loan!  I think the chirping smoke detectors is a way to attract the termites to "open season" homes.

you go girl

Yea...I agree with William and Andrew....on the head....hard for many to hear.

When you build a home for 100k, sell it for three times that, and collect 1-2 points per loan from some anonymous lender, does it really matter if you keep the clients needs ahead of your profits?

What I love is how these builders and lenders are JUST like the buyers. Did they set aside their earnings from the boom to make it through these tough times? Or did they use their banks as an ATM just like their clients did the home equity?

Charge it, baby! It's the American Way!

I would not want to one of the last ones in there with this going on.  They always blame us REALTORS  (WRONG!!1!1111!!!!)

It almost look like a ghost town the more I look at the pictures.

Renee,

WOW, those are stinging remarks!  Truth hurts!

See you in a few weeks!

Did you figure out a party time yet?

Lucky :)

We have a nationwide builder here that OVER built in one of my areas. It is a shame........so many foreclosures and the houses are down by 15%, lots of people can in on 0 down so no incentive to stay when they lose their job, get behind in payments etc.

Sounds like my brother in law's neighborhood.  I tried to warn them, but they wouldn't listen.  Now they can't even get their money back because of all the foreclosures, and they've outgrown the house.  Shame!

You're so right about the incentives that lured people into bad situations.  And Yikes!  That's a lot of foreclosure listings!

I have not seen new construction that is bank owned in this area. The builders in this area have slowed down a lot.

Renee,

Thanks for this post,

The Sad thing, is the builders have NOT changed. I have a client dealing with a builder's lender right now and is having major problems. 

We're seeing it all over Orlando!

Does the words trickery and deception come to mind?

What I find interesting is that EVERYONE had their hand in the cookie jar.  Ask a contractor what he was paying for steel studs and a board of drywall 18 months ago. EVERYONE had their hand in.

what a bummer for them! People went a little crazy and now their definitely paying for that.

Exactly right!

My friend....People buy "Payments" and want, want, want.  Very few ever think about tomorrow.  The media has groomed society to want possessions and want them now.  History always repeats itself.  Consumers got into adjustable rate mortgages in 1979 & 1980 and lost their homes in record numbers in 81,82 & 83.  So many articles were written about the danger of adjustable rate mortgages and look at what we do 20+ years later!

Thanks Renee...very good point about the "signs" literally and figuratively in subdivioions.

Plain and simple too many bad loans were issued to people not qualified creating too much money chasing property...homes got inflated.

Intriguing.....since I deal with many of the MAJOR builders in this area and often was dealing with their PSA's I can tell you that they pulled out of quite a few here even with hard money in place.  If Nevada is similar to Washington these lots were bought 3-4 years ago and they have no choice now other than to keep going to finish the subdivision otherwise they will lose more money with the structure of their loan.

What's curious for me locally is we are still gaining appreciation albeit slowly......the best new sign out today -

"NEW LOAN PROGRAMS - We'll Save Your Home!!! - 0% down - no qualifying"

 You'd think they'd learn eh?

You crack me up-it's just not rocket science, is it?

Renee - It breaks my heart to see how many people were victimized. Let the buyer beware.

Andrew:  Yes and that bred fraud from every aspect of the transaction.  I guess my big underlying poser is when are they going to start prosecuting and penalizing for the fraud.  There are OBVIOUS patterns!

William:  Exactly! 

Lucky:  Notchet!  Global Gaming Expo is going to be happening and I have to plan anything around the Aristocrat party!

Missy:  Exactly.  

Sarah:  Interesting so are they going to live with a little pain or walk away?  I am just curious?

Patricia:  Our small company of 80-ish agents is #8 in the valley with number of listings.

Gita:  Lucky you!

Gary:  I saw your post this morning.  Feel free to link to it!  I have sold a decent volume of new construction and I usually end up giving a little bit of my commission to their closing costs because of the bait n switch tactics of using their lenders.

Christopher:  I am NOT surprised.  I think the big areas that may be seeing this are the sunny southwest, florida and parts of texas 

Neal:  no, not at all :beingasmartass:

Chris:  YES they did!  Hand in the cookie jar is one of my sayings too!  You have people who bought prior to 2004, took out insane amounts of equity and are now selling short.  You have investors who saw QUICK dollar signs in 2004/2005 and rode the wave out to a long hold and are now letting the tenant occupied properties going back to the bank.  You had 100% loans with seller paid closings, no pain to walk away from that!  Failure to completely qualify a loan applicant and a little wink and nod to say "boost that income up a bit."    I could go on :)

Rick:  Absolutely!

George:  20 years is a long respite with an ADHD society!  Bueno!

Al:  :)

Carl: Homes got inflated from cheap & easy money.  Too bad that the lure of a cheap ARM couldn't trump a fixed 5.5

Ryan:  Great points!  Actually from what I understand there was also a big land grab several years back and many major builders hold options so they are pressured to sell out what they have now so they can exercise those options!

Leigh:  NOPE! 

Tom:  I think just as many consumers victimized the system as there are victims.  I wish the walls could talk when I go into a foreclosure.  Then again I am REALLY exhausted these days, maybe it is just hallucination :)

Renee, the more you write about the problems in LV the more I want to be there. There is an old saying "problems are opportunities."

Bill Roberts

Renee,

They dug their own Holes, it was just a matter of time I guess..

Tom Weiss

sounds good to me, going to have to start looking at the signs more!!

I am made the same connection over the weekend. I saw 4 foreclosures. Same floor plan, same neighborhood. HMMMMMM do you think there is a connection?

And even as we speak more ground is being broken - It is actually easier to get a client into a new build than a rental!

I have a wonderful woman who is looking for "affordable housing."  She sent a list of neighborhoods she would like to see...four neighborhoods, 1 builder, everything sold in the last 6 months that wasn't new construction was foreclosure or short sale.  

Why can't the media pick up on that???????

I hope it wasn't narrowed down to the builder on the deal we're working!!  Hope that closes on time!!

Read Section 10 of the 2007 TRENDS Report that discusses the HANGOVER our business is in after the 5 year long party.  www.RETRENDS.com

Too many agents, mortgage brokers and not enough quality control.

Renee, Sometimes we just hate the environmental restrictions that curb growth up here, not because of a threat to lake clarity, that's real, but some of the restrictions are arbitrary and without conclusive proof that they are of impact, but other times we really like the growth restrictions because we do not have the problems that come with it... like what you discuss here. it's a silver lining cloud sort of thing.

thanks for this one... 

Renee,  I don't know if I would blame lobbyists.  I would blame Wall Street for selling mortgage bonds to investors that didn't fully understand the fact that the loans used to finance all these primary, investment and second homes where underwriten by Stated Income standards (meaning fake income).   

We have a suburb of Waco,Tx that has a 2 year moratoriam on building because the utility services have not grown with the area. They have to put in more sewer lines, electric lines etc before they can start building again!!

Renee, I guess there's jmore than enough blame to go around.  But overeager lenders are certainly a big part of it...

Renee, ditto in Sacramento County! Makes you wonder doesn't it?

Geesh Renee...

It's like a disease. It's everywhere I go on AR right now. My goodness. It truly is a nationwide problem.

I feel it will get worse before it gets better. Or...I am stupid :)

TLW...ROAR!

Renee,

While I hear about greedy sellers every day during newscasts, I have yet to hear anything about the greedy builders who grossly overbuilt

Renee,

Some lenders have told me that underwriters gave the clear to close on loans but knew that most likely the buyer would not be able to make their first payment. Most of them took advantage of the system and took the money and ran. Who is to blame?

Most of the ones to blame are gone, I think we have been here before.

Greed.

Like a runaway freight train, the housing market did well with the loose money. Unfortunately, some of the bad seeds couldn't make it on the straight and narrow and did a lot of bad loans. Often colluding with appraisers and builders.

Sad

Someone already said run away train.  The meltdown is the best name they could call it, but it is really a diseaster.

Nice post,,, sooooo true,,, but THE BIGGER FOOL THEORY.....thats just priceless

Mike Norvell Sr

Plenty of blame to go around but it seems that in some areas the relationship between some builders and "preferred" lenders is very suspect.

Good post. A great deal of greed set in in Vegas over a short period of time. We got in and out just in time. Still love Vegas though and I know it will trun around soon.

Money talks in many ways, and the Real Estate profession is no different!

Preferred lenders over the past few years that funded all these interest only and rolled all the extras and closing costs into these properties are gone... and who's left holding the bag to help these people... we are.   I have visited more people in the past few weeks that are going to be foreclosed on or a short sale than I ever could have imaged.   Its very sad.

Aside from that .. hope you are good!!!

Honest post! It's certainly the same thing here in Michigan!

Renee,

I felt especially compelled to comment on this as I still see it happening. The fact is that builders and their "in-house" lenders directly violate RESPA by offering these incentives contingent on which mortgage company they use. If you or a seller were to offer a gift contingent upon a specific third party being used, you can bet the farm that you would be investigated and subsequently fined and/or have your license revoked. You know it, I know it, but the builders lobby is strong. Couple this with the fact that if you buy into a first or second phase, by the time the 4th or 5th phase is finished the homes are selling for 15%-25% less! Unfortunately the one thing that builders can count on is greed, so they offer ridiculous incentives plus up their co-ops to 5%-6%. I actually stopped working with a RE agent recently because she insisted on pushing her clients towards new construction, particularly in N. Las Vegas, one of the hardest hit areas of the valley in terms of value decline.

We're in foreclosure city down here, too.

Great blog and comments. It's certainly the bigger fool theory in motion. It will take awhile to correct.

Renee:

A few years back my husband and I looked into buying, we never told the builder I was a realtor and my husband a carpenter by trade, The builder did such a good job of trying to push everything through that what we wanted was no longer what we would get. The spec homes took priorty and the incentive of money back on closing was written in such a way it covered their end only and the excess funds were returned to them.They went as far as to say we had only so many days to choose exterior, roof, colors and interiors etc...and since we couldn't get a flight they wanted it done over the phone!!! HA!

Needless to say, we bailed - got the 10K deposit back - and didn't purchase a home in LV at that time.

The realtor we had in LV also tried to tell us that the market was so great and the appreciation value was going up 8% a month. Lucky for us, we researched ,watched the national trends and waited.

The market is finally going back to where it should have been. 

Patricia Zaller 

Speculators fueled many markets. Buy in "XXXXX" {name the market}, flip and get rich. Too bad so many buyers didn't do any diligence studies. I've shown flips with HORRIBLE floor plans, small parcels, etc. Too bad the speculation hit so hard. The people who got in last got hurt the worst and many really could not afford the hit!

Renee:

Great post. It is really a sad thing to watch greed at work. The one who really gets hurt in the end is "everyone:. The market effects in Vegas and Pheonix can be felt even in our stock market.

Nice post.

Renee, today, in a few minutes, I will be placing a final offer on a short sale to a lender, that financed two homes in the same subdivision in 2007 to the same buyer. His paperwork shows he was going to live in bothof them, and in fact has them both rented out..He made 2 payments on both properties, and never moved in...The have been lease optioned to tennants for 10k down apiece, with 1200 per month..

When I showed up to preview the homes, the tennants were in denial, I showed them the auction paper work that clearly stated the home will be sold on Jan 29, 2008...Fraud is everywhere..I do mean everywhere...

Bill:  Plenty of opportunity everywhere right now!

Tom:  Good analogy

Debra:  :wink: 

Rebecca:  Doesn't take a brain surgeon huh?  This week (so many months later) I noticed a HUGE amount of bank owned listings in ONE mid rise community.  The chips are falling 

David:  Right now it is.  I started taking short sale listings since I took this.  I counsel sellers who are in PRE-FORECLOSURE and need to stay in the valley what the rental market is like = not pretty!

Virginia:  Maybe not sexy for these large builders.  Deep pockets and all that :)

Donna:  Yes it was the builder but luckily it fell out! 

Allen:  True that.  I am thinking too much speculation also.

Gary:  THis is oh so true!

Steve:  Too many with their hand in the cookie jar from border line RESPA violations to Wall Street to individual speculators  who thought we would realize 30% appreciation per month forever.

Ann:  Wish it were so here!

Brian:  The builder/lender/title company relationships need to stop too! 

Gena:  Definitely one of those things that make you say HMMMMMM

TLW:  You are far from stupid!

Diane:  BINGO 

Chuck:  I think there is plenty to go all around!

Maureen:  More than likely!

Tom:  Yes, so true and I know we agree here!

Rosemary:  "Perfect Storm" also.  Too many ingredients for the making of the storm.

Mike :)

Bill:  Too much lobby money to have law enforcement look the other way I suppose!

Alan:  I feel it as the days go on!

Ronald:  So true

Dez:  Have a feeling that trend will continue for a solid year, probably two.

Jeffrey:  Thanks for stopping by and your input! 

Terry:  YIKES!  I did hae two sales last year in NLV but the buyers INSISTED on NLV.  NLV is scary because of all the growth, new homes and speculative activities.  I would say the vacancy rate in most new neighborhoods over there has to be WELL above 50%.  You sure can find a deal there now (this post written three months ago!) Good for you firing someone who doesn't agree with your work ethics and morals.  We need to be experts NOW more than ever!!

Robin:  Scary but provides great opportunities for buyers. 

Nancy:  And who knows how long!

Patricia;  And now you can find something at half price I am sure!  If you ever need a Vegas area Realtor to work with :winkwink:

Vickie:  SO SO TRUE!

Alan:  NO DOUBT!

Mike:  IF you go to Freddie's website, you can report that type of fraud.  It is called rental skimming.  Good luck.  Poor tenants.  Shows why option money must be escrowed even though it is non-refundable