Lenders Seize Half-Built Subdivisions, Then Offer Contract Jobs to Finish Them
LAS VEGAS – Home builders in some of the nation’s hardest-hit housing markets are going to work directly for banks, in a little-used arrangement that is helping to ameliorate conditions in some battered local economies.The builders traditionally got loans from banks to build homes, but that credit has largely dried up. The contract work builders are getting is welcome as many of them struggle to stay afloat…The trend helps preserve relationships between builders and lenders in a strained time for the two. In some of these situations, home builders are working for the same institutions that won’t lend money to them. While banks have hired builders before for fees, the trend is more prevalent now as more financial institutions own foreclosed properties, experts said.
By Jim Carlton, Mar. 1, 2010 WSJ