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Janices, Other/Just Looking in 33993

What happened with Hansen homes in 2006 in cape coral Fl. that they started a project were the buyers got constrcution loans from transfinancial bank

Asked by Janices, 33993 Fri Mar 2, 2012

then just walked away and left the buyers owing on bank loans/

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BUDDYBOY’s answer
Hi! What happend was borrowers (mostly no money down investors) got loans from banks to fund construction of their homes and the banks over extended themselves and were ordered to shut down loans on homes that were over a six month lending period (construction was taking 18-24 months at that time). Hansen Homes couldn't continue to build homes without money and most borrowers couldn't get another loan to complete the projects. The builders didn't walk away from anything, they just couldn't continue due to the banks shutting down the construction loans. This happened to many builders at the time. The banks didn't pay them for the work they did and the borrowers were left paying on partial loans. Everyone got screwed cause the banks got greedy and gave loans to people who never should have qualified.
0 votes Thank Flag Link Thu Feb 28, 2013
Banks got greedy? Banks are institutions that lend money for profit. That is not greed, that is business. Our federal government in 1998 decided that not enough low income people owned homes, and introduced a bill forcing banks to dramatically ease their guidelines required to qualify. Home buyers were begging for it. Before that, qualifying was much more strict. Suddenly, everyone wanted to own homes, and it was easier to qualify. The banks were threatened with million dollar fines for not making loans easier. I hardly see this as greed by the banks. One could argue that no one HAS to buy a home. And when they see that expensive home, and realize they dont have cash for it, no one forced them to go to a bank, apply for a loan, promise to pay it back, and then close. The "banks are greedy" arguement is getting old. Dont like loans, dont borrow. It is so easily avoided.
Flag Thu Feb 28, 2013
If the bank won't release the funds, the builder can't build the home. The buyer, not the builder, is responsible to finance the construction.
0 votes Thank Flag Link Sat Jul 14, 2012
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