The banks usually had relationships with builders who would purchase the property out of foreclosure at a substantial discount, finish the home off (with a new construction loan from the same bank) and then sell the finished home off. Other than the bank taking a bath on the initial loan it worked out for everyone.
A lot of it depended on what stage the construction was in when the original builder walked. If it was still in framing and had been sitting exposed to the elements for a long time the new builder would have to tear out the framing and start over. If it had been roofed and stuccoed the structure could withstand more time and weather without much damage. More than one of these homes burned down under mysterious circumstances either before or after foreclosure.
And no, I am not aware of any half-finished foreclosures yet, but it’s just a matter of time. They’re building so many McMansions in Carmel Valley and wannabe Rancho Santa Fe that I expect some bottomfishing opportunities to crop up in the next year or so. There’s no way all those homes are going to sell given the current pace of sales.
