Banks Swing Hammers to Finish Homes
Las Vegas is ground zero for residential foreclosures. It's also where a little-used arrangement is making things a bit better for banks, builders and construction workers. One lender there hired a builder to finish hundreds of partially-built condos plopped on its books after it foreclosed on the original developer. The alternative was steep losses for selling the condos as-is. Instead of sales profits, the bank-contracted builders get paid flat fees.
"It helps stop the bleeding," developer Randy Schaefer told the Wall Street Journal's Jim Carlton. "It's not my first choice, but it helps keep me in business."
The banks-hiring-builders trend helps preserve relationships in a strained time for the both parties. In some of these situations, home builders are working for the same banks that won't lend money to them.