How would you guys handle this?

[Juan_Hong_Loe]

Serious replies please...

My sister and her husband decided to build a house. They found a piece of property that they liked in a pretty nice neighborhood and bought it. Financed it for about a year before making final plans to build. Got a respectable builder and pulled the trigger. From my understanding in order to not have to have two separate payments they needed to somehow get the land signed into the construction loan or something like that. To my belief it was just to make closing and payments easier in the long run. The house is framed and "blacked in". Windows installed and all but the front door is there as well. The builder just up and stops taking their phone calls and will not make any attempt to get back with them. Tried to get his wife to make sure he calls them back but not happening. My sister just got a phone call from him this morning only to hear him tell her that he is filing for bankruptcy!!!!! Since the land was signed into the loan for the house that is not finished and essentially not theirs until builder finishes it, seems they're screwed! Anybody have any advice or know what should be done. Seems to me like there should be some law protecting them from something like this but at the same time maybe they shouldn't have signed the land over. I pretty sure my sister is going to lose sleep over this so I'm trying to help her find a solution. The builder told her also that it would be 6-8 months before the bank could release the loan to someone else...

If it were actually happening to me the builder would probably have broken legs!

 

[xjkrawler]

unfortunately this has happened to alot of people in this day and age. the land developer that i am working for has ALOT of rules and regulations on who can build in his subdivisions and who cant to keep this from happening. ive also been working for a local bang doing construction loan inspections and 99% of the time the homeowner is the one with their name on the loan.

was this an already developed subdivision? who developed it?(who did they buy the land through?) did the developers have set regulations/ a list of builders for them to use when they decided to build? my guess is this was a subdivision that had been developed in previous years and they just bought into it.


is there name on the construction loan or is it the builder?

 

[B Gillespie]

Lawyer time.

 

[xjkrawler]

Lawyer time.

that would be the best/quickest thing you could do. but gonna cost extra money

 

[bigsilly]

I am guessing the construction loan is not in their name? If that is the case, big first mistake.

 

[Juan_Hong_Loe]

was this an already developed subdivision? who developed it?(who did they buy the land through?) did the developers have set regulations/ a list of builders for them to use when they decided to build? my guess is this was a subdivision that had been developed in previous years and they just bought into it.

Sudivision is an old one just been added on over the years and its part of the newest addition. They bought the land by picking up the loan from the previous owner. They just transfered the loan to their name.

is there name on the construction loan or is it the builder?

Not sure but I'll find out. Pretty sure it's not though

 

[bigsilly]

Man if there name is not on the loan that is going to get tied up in bankruptcy court. They may be able to get a new construction loan in their name and "buy" the house under construction and finish it out with another builder.

 

[John Galbreath Jr.]

Time for a lawyer. I don't feel they have the expertise to proceed alone.

 

[kid rok]

Without seeing the contract they have between them and the builder, it is hard to say if there is anything that can be done. Normally, the real estate agent who is assisting them will make sure there are stipulations within the contact that will prevent this from happening. I would get a real estate attorney. Some will talk to you over the phone and not charge. Make sure to use one in the state you are in so that they know RE law.

 

[xjkrawler]

Man if there name is not on the loan that is going to get tied up in bankruptcy court. They may be able to get a new construction loan in their name and "buy" the house under construction and finish it out with another builder.

i agree here. the construction loan should always be under your name.

 

[Juan_Hong_Loe]

Looks like they are screwed! Their name was not on the const loan. So I guess its time for a real estate lawyer.