Last week, I wrote about defaults resulting from Occupancy Fraud (obtaining a mortgage loan based on a false promise that one will live in the unit as a principal residence)
This morning I wrote about a developer who is being sued for trying to cancel (discounted) pre-construction contracts in an effort to pocket the profits he was originally willing to forgo to get secure those buyers in the first place. His margins are getting so close that he need cannot afford to let those buyers proceed on their speculative contracts.
Toll Brothers, the country's biggest builder of luxury homes reports that included among the 28% of all buyers who canceled their purchase contracts in the fiscal quarter ended January 31, 2008, is the co-founder / vice chairman's own daughter! Reportedly, she signed the contract to buy a Florida condominium for $2.5 million (on the friends and family discount plan) but will not proceed to closing.
How bad is the marketplace, that the firm leadership's own family is willing to default on a contract? Toll Brothers says its cancellation rate in Florida was nearly 61% thu the 12 month period ended Oct. 31, 2007.
Toll Brothers response to the news? The company "intends to pursue its rights" under the purchase agreement.
as i said just hours ago, with friends (family) like these.....