Foreclosing on homes before doors go on

Jan. 23, 2009 at 3:45 PM
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DALLAS, Jan. 23 (UPI) -- Reports indicate that the growing number of home builders going out of business has left some U.S. house buyers with unfinished homes on their hands.

The National Association of Home Builders estimates 20,000 builders have been forced out of business since 2006 due to the housing bubble, the slow economy and the credit crunch.

Sotherby Homes, which has built as many as 300 houses a year in Texas for 14 years, suspended construction of a house in Plano, Texas when lenders cut off funding, The Dallas Morning News reported Friday.

With the home 80 percent built, buyer James Sharp said he was working with lenders "trying to come up with some kind of resolution."

Banks foreclosed on the home, which still belonged to the builder, but Sharp had also invested in the project.

"With the credit crunch, the lenders are looking to reduce their exposure to real estate," David Brown at MetroStudy Inc. told the Morning News.

"Some banks and lenders are very wary of adding to their share of real estate loans given the current situation," said D'Ann Petersen, a business economist with the Federal Reserve Bank of Dallas.

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