On the one hand the buyers seem both greedy and naive to have invested with intent to flip (on unbuilt condos) and they are now crying foul as closings approach. On the other, the developers' reps should not have made grandiose claims on profits from flipping and they should not have sold condos to people without income checks. The down payment was not enough! According to real estate analyst Jack McCabe:
''The question for the developer would be, how could you accept contracts from a housekeeper who obviously didn't have the income or the wherewithal to close -- unless you were guaranteeing she could flip them for a profit?''
To me the following is the most important consideration and the question lenders should be asking (also from McCabe who said if what the housekeeper said is true):
"...it would illustrate just how speculative the condo-building boom in South Florida became. In essence, it would mean developers relied in part on shell buyers to meet presale requirements and qualify for construction funding."
And what is with the Miami Herald? In the article they say that the housekeeper had used the money from a lawsuit settlement from a car accident to put a down payment on 6 condos. The Herald calls her settlement "winnings." An accident settlement is not a lottery. Have we all gone mad?
2 comments:
you are right that these suits will be important to one side or the other....could cut into Jorge Perez's billion dollar reserve...
I was also struck by the use of the term "winnings." Are car accidents a business now?
(see separate reflection)
S
Post a Comment