Bad Timing Leaves Central Florida Residents Without Financing On Newly Constructed Homes As Lower Values Lead Lenders To Back Out Of Loan Commitments

In Central Florida, The Tampa Tribune reports:

• Every day, Mary McCarthy must drive past the finished dream home in her front yard to the mobile home where she has lived for 20 years. The new home was finished in February, but she can't move in. The home is not legally hers, though it sits on her property. The best she can do is open the front door and feel the rush of the air conditioning that she is paying for so mold won't grow inside.

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• McCarthy's empty home is a symbol of poor timing amid the worst mortgage crisis in decades. As property values plummet, those caught midway through new home construction learn an awful fact: They can't find a lender willing to give them a loan. The three-bedroom, 1,800-square-foot home is in limbo. Just before the closing, the lender backed out, saying the home was no longer worth the original loan amount.(1) The builder hasn't been paid and has sued the lender. McCarthy can't find another lender willing to give her a loan and now faces liens on the one-acre property.

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• All this sounds familiar to Carol Robinson of Ocala. She, too, decided to build a home on land where she lives in a mobile home. When her lender, Ocala National Bank, shut its doors in January, the lender that took over did not want her construction loan. Instead of going through a builder, Robinson had hired subcontractors to do all the work, one part of the home at a time. The home is now 60 percent complete, and she doesn't have the money to finish it.

For the story, see Dream of new home turns into a nightmare.

(1) Reportedly, as home values continue to fall, lenders increasingly are deciding not to fund loans for new homes - even those that are partially or completely finished - because they're worth so much less than the originally agreed upon loan amounts.