This article mentions that there are a number of class action lawsuits being files against lenders and their mishandling of foreclosures. This si the first I have heard of this and I have been wondering when they would begin. I expect these lawsuits to include home builders once the research has been done.

In Maricopa Arizona, a new city was born virtually overnight. Once a sleepy little farming community just south of Phoenix, it was “discovered” by deveopers and the population grew from around 7,500 to over 30,000 in just a few years. Demand grew, prices rose and lotteries or waiting lists of over 200 buyers were not incommon. Part of the “fuel to the fire” was the fact that the new home builders offered terrific incentives, to buyers and realtors alike,  and did their own financing (and therefore appraising).

Many believe that the builders were deliberately over appraising homes just to keep the bubble growing. When it finally burst, it was not uncommon for someone to close on their home only to see their new neighbor down the street acquire the same home for 20% less, WHILE THEY WERE MOVING IN!

I don’t want to simplify things as their is more than enough blame to go around, including greedy and uninformed buyers. But as I watched many of these homebuilders bail out on half finished communities and declare bankruptcy, I have to belive that the homebuilders were a major player. At least in Maricopa Arizona.

http://bit.ly/bwnI4b