Know What You're Getting Into...
For the owner/developer on smaller projects financing is usually the key to the entire transaction. Getting the financing in place and making sure money exists for your draws is one of the tasks you have during the construction phase that gets you to your end profit… be it selling what you’ve built, or having a building of your own.
You really do need to make sure that what you’re getting from your lender is what you want. You need to read the documents and double-check the figures or you could end up with, literally, a hole in the ground.
We’ve heard the radio reports and read the news articles about what some loan companies are alleged to have done to those seeking financing over the past few years. The mortgage crisis is partially a result of supplying loans that weren’t justified by the numbers. But for some developers, even with the numbers, getting the terms they bargained for and the loan they wanted appears to have been a problem. It’s why you really do need to be vigilant even in the beginning of the transaction, not just at closing on the loan.
This complaint reads like a parade of horribles and alleges what must have been a nightmare for the plaintiff.
After purchasing a piece of land and constructing a home for sale the financing errors which were allegedly generated through the application and appraisal process, compounded by the closing documents, and exacerbated by the lenders action in processing payments, resulted in an upside down mortgage situation for a developer now stuck with the fruits of what are allegedly the fraud and deceptive practices people have been reporting on since the crisis began.
You need to watch the financing process like a hawk, especially if no one is there to help explain everything to you.
