If you can't beat them, sue them. I have been waiting for this article. We must be near a bottom in the real estate bust if home buyers are starting to sue developers. This happened in the late 1980s and early 1990s. Homeowners started to sue when the value of their new homes dropped. Buyers in the early phases of developments sued the builders when prices were lowered for later phases. This is called a market. Developers are not lowering prices due to altruism. What if the developer went back and demanded a higher price from the early phase buyers if it was able to obtain a higher price from later phase buyers. This would be unheard of. I love this section:
This lady thought she was Donald Trump. More like Donald's long lost cousin, Gary the Retard.
Other disputes are more heated. Red Bank, N.J.-based Hovnanian, one of the largest builders in the U.S., currently is embroiled in one such dispute with buyers in Florida.
One of those buyers, Daphne Sewell, received three construction loans, totaling about $750,000, to buy three houses in Cape Coral and Lehigh Acres, Fla., in May 2005.
An administrative assistant in Broward County government, Ms. Sewell said she and her husband, a carpenter, earned $90,000 a year at the time of the deal and never should have qualified for their mortgages. She also claims a real-estate firm involved in the deal promised that it would find them tenants to rent out the houses. But the renters never materialized, her houses are vacant, and two of her loans are in foreclosure.
"If I close on them I deplete my savings in two or three months," said Ms. Sewell. "It's worth the fight."
After she was served with foreclosure lawsuits by the lender, she filed a countersuit, which names the builder, First Home Builders of Florida, the lender and a real-estate firm that she alleges promoted the deal, claiming she was defrauded by an investment scheme that promised minimal risk. A lawyer for First Home Builders said his client denies any wrongdoing.
This quote from a principal of a developer sums up my feeling on the matter:
"These are not situations where a woman bought a unit and she's now a widow and can't pay," he said "These are people who don't want to close because they can't flip and make $100,000."