A Reality Check

 

December 2008
We are all aware of the current economic disaster, especially in the housing industry. The current problems were very predictable and we, at Hallmark, had been expecting a “meltdown” for a couple of years now.
The key issues include:
  1. Reckless lending by lenders**.
  2. Reckless legislation by legislatures.
  3. Reckless terms offered to clients/borrowers.
  4. Irresponsible appraisals leading to financial overextensions harming both lenders and borrowers.
  5. Unrealistic expectations by the buyers resulting in the construction and financing of homes they could not afford.
  6. Unscrupulous Builders expecting unrealistic profits on homes.
  7. Irresponsible and unrealistic fees and ordinances placed on builders by local communities, zoning officials and building officials.
**NOT all Banks have participated in this fiasco and many are here to responsibly work with you to help you get a loan to build your home.
 
Well, we all know what has happened. HOW do we move forward ?
 
Things will change. For the short terms it will be more difficult to get a construction loan. Banks are cautious in that construction funds cannot be sold in the market until they are turned into permanent loans (mortgages). The Banks’ shortage of funds due to bad loans, long term outstanding construction loans, simple foolishness, etc. have caused a cash crunch. For the long term things may also become more realistic but I am afraid that greed, bureaucratic red tape, unreal expectations etc. will never go away completely.
 
For now:
  1. Most Banks will expect 25% down or equity.
  2. If you own your land, your land will most likely meet the Bank’s requirements.
  3. Most Banks will require the Owner/Builder to retain the services of a General Contractor, even if you want to build your self.
  4. YOU, the borrower, will need to be more realistic with your expectations and build something you can afford.
 
THE GOOD NEWS:
Hallmark has always preached “conservatism” in building your “dream.” We have been in business for over 33 years and our experience will help and guide you in your future plans to build a new home. This is the best time to consider a “Hallmark Modular Solution” for your new home OR to show you how you can build a new replacement home on your current site, should you be considering major renovations to an older home.
 
Hallmark Homes, Inc.
Email: hallmark@hallmarkmodularhomes.com