NJ Consumer Advocates Call For Law To Protect Customer Deposits Paid To Homebuilders

In New Jersey, the Asbury Park Press reports:

• In the wake of Kara Homes Inc.'s bankruptcy, New Jersey should pass a law that would safeguard home buyers' deposits until the home is complete, a consumer group said last week. A law, modeled after an existing law in California, would change a common practice in which home builders use deposit money to fund their operations. As it stands, if a home builder goes under, buyers risk losing thousands of dollars.

• [The bankruptcy filing] left many Kara customers in the lurch. Elliot Egenburg, 40, of New York City, put down $220,000 to purchase a Kara home at Crine West in Marlboro. The project's lender, Amboy National Bank, eventually foreclosed on the property, leaving buyers to get reimbursed through bankruptcy court.

For more, see Consumer advocates want law to protect buyers.

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