Crooked Lenders, Shady Builders & Naive Buyers

[bachanon]

and so it begins.............

Empty houses, falling prices: A boom dies

You can see how the housing bubble is bursting in places like Columbus, Ohio, where builders and lenders threw common sense away and enticed people to buy homes they couldn't afford.

By Bill Fleckenstein

Regular readers know that since early 2004, I have described the housing ATM as what's allowed the economy to move forward.....

link

we can look forward to similar stories about builders such as d. r. horton and other low-moderate end mass home builders in our area.

[TJones]

and so it begins.............

Empty houses, falling prices: A boom dies

You can see how the housing bubble is bursting in places like Columbus, Ohio, where builders and lenders threw common sense away and enticed people to buy homes they couldn't afford.

By Bill Fleckenstein

Regular readers know that since early 2004, I have described the housing ATM as what's allowed the economy to move forward.....

link

we can look forward to similar stories about builders such as d. r. horton and other low-moderate end mass home builders in our area.

If I had a nickel for everytime I heard, "the housing bubble is going to burst", I'd have like 52 nickels.

[bachanon]

my interest in this article was not so much about the housing bubble but the shady lending practices going on to naive first time home buyers. these mass production builders have been selling to thousands of people in the houston area who can barely afford the payments. some of us here at haif have used the term "slums of tomorrow" and it may well be coming to pass (sooner than i thought). it will be interesting to see how all of this pans out in the suburbs of houston.

[TJones]

my interest in this article was not so much about the housing bubble but the shady lending practices going on to naive first time home buyers. these mass production builders have been selling to thousands of people in the houston area who can barely afford the payments. some of us here at haif have used the term "slums of tomorrow" and it may well be coming to pass (sooner than i thought). it will be interesting to see how all of this pans out in the suburbs of houston.

I have to agree there, any suburb these days, that advertises houses starting at 90's to 100's. I hate to say it, but can you say "cars sitting on blocks in the yard 15 years from now." I hate these cookie cutter, box of nothing, with no taste, or imagination for elevation at all just "URK" me ! Can't these guys come up with just a little flair on these shacks ? I apologize to those who may read this and think, "wait a second, he's talking about my house." I am happy for you that you have your own house, I know you were excited about it when you first moved in, but as soon as you see that you might be able to make a couple of bucks off of it, SELL IT ! Go find an older house with a little feeling to it. Do yourself that favor.

[VicMan]

Or build new houses with feeling to it. Braeswood (within the 610 Loop in Houston) has some really nice-looking new homes.

There is a woman in my neighborhood who said she chose to build it with a standard style because it would match up with the neighbors. I want to tell her that she needs to have her own style.

The housing bubble may burst in the burbs, but it should still go strong in the heart of Houston.

My mom feels exactly the same way as you guys do about houses. She wouldn't stand Houston if she was in New Territory, for example.

[hydepark]

I have to agree there, any suburb these days, that advertises houses starting at 90's to 100's. I hate to say it, but can you say "cars sitting on blocks in the yard 15 years from now." I hate these cookie cutter, box of nothing, with no taste, or imagination for elevation at all just "URK" me ! Can't these guys come up with just a little flair on these shacks ? I apologize to those who may read this and think, "wait a second, he's talking about my house." I am happy for you that you have your own house, I know you were excited about it when you first moved in, but as soon as you see that you might be able to make a couple of bucks off of it, SELL IT ! Go find an older house with a little feeling to it. Do yourself that favor.

Thank you tjones...I no longer feal alone. How do we make people realize we are being sold eye-candy and no quailty or lasting construction?

and so it begins.............

Empty houses, falling prices: A boom dies

You can see how the housing bubble is bursting in places like Columbus, Ohio, where builders and lenders threw common sense away and enticed people to buy homes they couldn't afford.

By Bill Fleckenstein

Regular readers know that since early 2004, I have described the housing ATM as what's allowed the economy to move forward.....

link

we can look forward to similar stories about builders such as d. r. horton and other low-moderate end mass home builders in our area.

[hydepark]

Thank you tjones...I no longer feal alone. How do we make people realize we are being sold eye-candy and no quailty or lasting construction?

This is so sad. Foreclosures have already doubled in Houston from last year. And these figures aren't even accurate. There are bottom feeder investors out there getting homeowners to sign away their power of attorney, so they can negoicate a lower price on said house with your lender. These bottom feeders then buy your home for less than you could ....and for your loss you do not have a foreclosure on your credit report. However you are still broke and homeless. Many of Houston's homeowners have been forced into this situation because the construction of their new dream home became a nightmare and they can't afford all the repaires. The builder has nothing but excuses and help for thier misdeeds.

They are aided by the powers in Austin and TRCC. Buy an older home and fix it up. Then maybe in 10 years your home will still have some value.

No one protects the consumer.

Homebuyer beware especially in Houston Texas!

[hydepark]

Thank you tjones...I no longer feal alone. How do we make people realize we are being sold eye-candy and no quailty or lasting construction?

Unforutnalntly, the housing starts are used an economic indicator ...so the more houses that are permitted the healthier the economy looks. When the flood of half inspected, half permitted houses are built and the public outcry is heard, it will be to late for many an unsuspecting, unprotected homebuyer. This city will rein as king over defective properties, like Tremont Towers and many others by decftive builders. Their greed is limitless.

[houstonhomes]

I've heard Mortgage Brokers have gone as far to qualify illegal immigrants for loans by helping them find a social security number for their application. Too often, the mortage broker is tied in with the builder. The loose lending practices are a license to print money.

The Texas Savings and Loan Department's complaints have already doubled this year vs. 2004. They're doing the best to handle the increased load, but is this department the only source of enforcement?

[RedScare]

Too often, the mortage broker is tied in with the builder.

What's wrong with that? Many of the big builders, such as Ryland , Pulte or KB Homes, have their own mortgage company, to help people buy their homes.

GM has GMAC. Ford has Ford Motor Credit. Toyota has Toyota Motor Credit. Are all of these bad, as well? Why can these huge automakers and homebuilders have financing arms, but if a small builder secures financing for his buyers, he is an evil cretin?

I don't get it. Maybe, since you've done copious research on the matter, you could enlighten us as to why this is a deal with the devil.

[hydepark]

What's wrong with that? Many of the big builders, such as Ryland , Pulte or KB Homes, have their own mortgage company, to help people buy their homes.

GM has GMAC. Ford has Ford Motor Credit. Toyota has Toyota Motor Credit. Are all of these bad, as well? Why can these huge automakers and homebuilders have financing arms, but if a small builder secures financing for his buyers, he is an evil cretin?

I don't get it. Maybe, since you've done copious research on the matter, you could enlighten us as to why this is a deal with the devil.

Why do you attack everyone that posts... who are you angry with? Are you a builder?

[Guest danax]

What's wrong with that? Many of the big builders, such as Ryland , Pulte or KB Homes, have their own mortgage company, to help people buy their homes.

GM has GMAC. Ford has Ford Motor Credit. Toyota has Toyota Motor Credit. Are all of these bad, as well? Why can these huge automakers and homebuilders have financing arms, but if a small builder secures financing for his buyers, he is an evil cretin?

I don't get it. Maybe, since you've done copious research on the matter, you could enlighten us as to why this is a deal with the devil.

I don't think these builders that have there own mortgage brokerages are doing anything shady. They just saw the other brokers making a lot of money on their sales and decided to get the license, hire a few people and quit leaving all that money on the table. The main problem is just that, a lot of the time, they're just not very good at finding the best program for the homebuyer. And, they offer the homebuyer "discounts" on upgrades and closing costs if they use their mortgage company but drop those discounts if the buyer finds his own financing help. Then, the home is no longer such a good deal but the buyers have become attached to "their home" as they've been picking out colors etc. for weeks and months are have a hard time walking away. There was a law proposed this summer to stop these incentives so as to level it for the homebuyers but, not surprisingly, it didn't pass. I look at that as a loss for Joe Homebuyer and a gain for "The Construction Industry". Other than that, I don't think them handling both ends is a big deal.

As for Social Security fraud to get "deals done", well, it probably is happening occasionally but fraud is something MOST brokers and lenders are always on the lookout for and a lot of lenders do SS checks before closing anyway.

The problem I see is just the amount of adjustable rate, 100% mortgages that are out there in the "subprime" market, meaning for people with fairly bad credit. They usually stay fixed for the first 2 years then start adjusting, always up. It remains to be seen how subprime borrowers will handle payment increases if rates go up and they find they can't refinance in 2 years as they had planned due to lack of equity/money. I have started to see some of these easy programs begin to tighten up just a hair as rates have increased so maybe we've seen the peak of all of that for awhile.

[RedScare]

Why do you attack everyone that posts... who are you angry with?

I'm an anarchist.

This is me on vacation.

[bachanon]

my parents are having their 1972 kitchen remodeled. the builder commented that the timber used for the construction of a 1970s era house is far superior to homes built today. i took a gander at the same wood and it's amazing the quality of 2x4s from 30 years ago in comparison to the crap we have today.

[hydepark]

Carlisle Homes?

On the web page Carlisle Homes is advertized as being owned and founded by Perry Thomas in 1996. His philosophy "We do what's right".

However, checking with the Secretary of State's office we find that Carlisle Homes was purchased in 1997 with the right to use the assumed name Carlile Homes. Now, who would want to hide under another builders'name and why?

[Guest danax]

Carlisle Homes?

On the web page Carlisle Homes is advertized as being owned and founded by Perry Thomas in 1996. His philosophy "We do what's right".

However, checking with the Secretary of State's office we find that Carlisle Homes was purchased in 1997 with the right to use the assumed name Carlile Homes. Now, who would want to hide under another builders'name and why?

Maybe it's just for convenience. People probably misspelled Carlisle so many times on contracts, legal documents etc. they just threw up their hands and said "OK, we'll be Carlile too".

[hydepark]

Maybe it's just for convenience. People probably misspelled Carlisle so many times on contracts, legal documents etc. they just threw up their hands and said "OK, we'll be Carlile too".

I mis spelled Carlisle Homes too. I guess Tremont and Stature Construction could have done it for spelling reasons do ya think?

[TJones]

I'm an anarchist.

This is me on vacation.

Nice picture, you really should do something about those ears, you could pass for a Vulcan for cryin out loud !

I was thinking about this thread, and I can't see the housing bubble bursting anytime soon here in Houston. We just got an infusion of 150,000 people, who are not going back home, and are going to have money to spend on a house, or new apartment. Does anyone else see the same way on this ?

[houstonhomes]

The problem I see is just the amount of adjustable rate, 100% mortgages that are out there in the "subprime" market, meaning for people with fairly bad credit. They usually stay fixed for the first 2 years then start adjusting, always up. It remains to be seen how subprime borrowers will handle payment increases if rates go up and they find they can't refinance in 2 years as they had planned due to lack of equity/money. I have started to see some of these easy programs begin to tighten up just a hair as rates have increased so maybe we've seen the peak of all of that for awhile.

I agree..the interest only and ARMS loans will suffer as interest rates rise. It will be 'interesting' to say the least when this happens. Since the bankruptcy laws have changed, there will be no way out.

Sure, builders set up their own mortgage companies to capalitize on more profits. But, really, now who are the mortgage companies looking out for? This leads to high pressure sales tactics and more opportunity for fraud. The builder now chooses the appraiser, the '3rd party' inspector, and the title company, all which once had never had an interest in either party, now are out to help the builder and not the consumer.

[houstonhomes]

Carlisle Homes?

On the web page Carlisle Homes is advertized as being owned and founded by Perry Thomas in 1996. His philosophy "We do what's right".

However, checking with the Secretary of State's office we find that Carlisle Homes was purchased in 1997 with the right to use the assumed name Carlile Homes. Now, who would want to hide under another builders'name and why?

Just checked w/ the Secretary of State - Carlisle is a Tremont DBA:

Filing Number: 109532300 Entity Type: Domestic Business Corporation

Original Date of Filing: November 17, 1988 Entity Status: In existence

Formation Date: N/A

Tax ID: 30113190414 FEIN:

Duration: Perpetual

Name: STATURE CONSTRUCTION, INC.

Address: 2318-A S SHEPHERD #605

Houston, TX 77019 USA

REGISTERED AGENT FILING HISTORY NAMES MANAGEMENT ASSUMED NAMES ASSOCIATED ENTITIES

Assumed Name Date of Filing Expiration Date Inactive Date Name Status Counties

CARLISLE HOMES April 2, 1997 April 2, 2007 Active HARRIS,

TREMONT CUSTOM HOMES March 15, 1999 March 15, 2009 Active All Counties

[sandrak]

What's wrong with that? Many of the big builders, such as Ryland , Pulte or KB Homes, have their own mortgage company, to help people buy their homes.

GM has GMAC. Ford has Ford Motor Credit. Toyota has Toyota Motor Credit. Are all of these bad, as well? Why can these huge automakers and homebuilders have financing arms, but if a small builder secures financing for his buyers, he is an evil cretin?

I don't get it. Maybe, since you've done copious research on the matter, you could enlighten us as to why this is a deal with the devil.

Hi, I'm a new Houstonian. I just moved here from Austin and I sell real estate there currently. I'll eventually move my practice here, but I'm in no hurry.

My brokerage in Austin is a small high-end boutique firm who has an in-house mortgage company, which is not associated directly with the firm. It's a convenience to be able to advertise that you can provide one-stop-shopping for your clients, but I also feel it's a conflict of interest. Yes, builders do it, auto dealers do it, everyone does it, but that doesn't make it right. I think it's greedy, but more importantly, I think it could cause some clients to question your loyalty. Some look at it as an added service, but the risk of losing just one client's trust is too much for me. I work 100% off of referrals now and that's because I don't play with my clients' trust.

[Guest danax]

My brokerage in Austin is a small high-end boutique firm who has an in-house mortgage company, which is not associated directly with the firm. It's a convenience to be able to advertise that you can provide one-stop-shopping for your clients, but I also feel it's a conflict of interest. Yes, builders do it, auto dealers do it, everyone does it, but that doesn't make it right. I think it's greedy, but more importantly, I think it could cause some clients to question your loyalty. Some look at it as an added service, but the risk of losing just one client's trust is too much for me. I work 100% off of referrals now and that's because I don't play with my clients' trust.

Welcome to the forum, sandrak. As for combination realty/mortgage, the potentially positive aspect for the client is that, if the brokerage is handling both the home purchase and the home loan, there is a greater chance to offer the client either one of those services at a reduced cost, since the combined profit is large enough to allow for discounts, or even a refund of commission at closing, which is something a lot of homebuyers would like; cash in hand to buy furniture, upgrade the house, etc. If the client finds the home they want, gets a good loan and, gets money back at closing, everyone's happy.

As we try to avoid any direct advertising here, if you P.M. me, I can give you the name of a small brokerage doing just that.