FLA homebuilders: Heeeellllpppppp!!!!
The Florida Home Builders Association is in such dire straits that it actually called a newser today to announce that the banks are killing them:
Here’s what’s happening in a nutshell: Banks that gave loan to builders in better economic times are now reappraising the value of their loans. The loans were based on earlier projections of home prices and, now that those values have dropped — by as much as 30 percent — banks want builders to make up the difference. Banks are conducting ‘capital calls’ and demanding large amounts of cash from these builders to restore the original loan-to-value ratio.
No surprise, the builders can’t manage it. “The cash call is forcing builders into insolvency,” said Jay Carlson, president of the Florida Home Builders Association. The building industry troubles that are already wreaking havoc on the state’s budget “have gotten much worse and the result will be further deterioration of Florida’s economy.”
The answer, they all say, is a time out — not a bail out. They want a moratorium on lending insitutions calling in loans. They want government — state and federal — to help homeowners to stop the spiraling decine in homeownership that has 54,000 homes in foreclosure in Florida and homes around all of them rapidly declining in value. And they want Congress to stop banks from taking bail-out money on the front end, but closing credit to builders on the back end.
Read more here.
