Oh NO doubt these kinds of shenanigans have been going on a while. But at least during the depths of the Great Recession you didn’t see them so aggressive like now. And there was not really this sense of urgency by these people that not so long ago recently defaulted to buy a “new home”. And I guess since there is not much pre-existing inventory in many cities the new stuff is their only route to home ownership again.
And now the builders are eating their cake too. They’ve been able to strip out many of the upgrades and people are paying more than ever to get all these “upgrades” where during the bubble it seemed like they almost had to include many of them. They are charging them a fortune. I’m not sure if you saw that Wall Street Journal a few weeks ago about people spending hundreds of thousands of dollars in upgrades. I believe they used one couple in Irvine as an example.
The more things change the more they stay the same……[/quote]
Builders were ALWAYS aggressive in bending over backwards to qualify prospective buyers with their “in-house” lender. These same prospects would have no doubt been sent packing by a direct (conventional) lender or reputable mortgage banker.
I’m not so sure about the integrity of most mortgage brokers. They were a HUGE part of the problem in causing the “crash” of ’07/08 and beyond.
As for “upgrades” being included in new housing, if it is marginally qualified or unqualified buyers who are no longer able to get them … my take on that is “beggars can’t be choosers.” I don’t know the inventory levels of the resale market on the east coast (where the buyers in the WSJ article were) and I couldn’t read the rest of the article because I don’t have a subscription. HOWEVER, SD has PLENTY of inventory below $400K and THAT is the market where these newly-minted post-foreclosure/SS buyers should be shopping in . . . that is, IF their FICO score has recovered enough to obtain financing.
In CA, those “marginal” buyers have no business shopping in new home tracts with their attendant HOA dues and (now very high) MR, IMO. A combination of those monthly expenses plus PITI was likely what got them into the mess they just “semi-successfully” crawled out of.
Again, beggars can’t be choosers. These “buyer-hopefuls” need to lose their burning desire for the “luxury” neighborhood they couldn’t afford then and can’t afford now. It’s time to start over.
