Financing is impossible, deals are falling apart, lawsuits are coming — real estate lawyers are the frontline workers of a sharp market drop.
Now we have other kinds of problems with buyers getting financing. Let’s say you bought a condo four or five years ago, and now it’s ready to be built. You qualified for the mortgage four or five years ago, when the interest rate was 1, or 2, or 3%. But now you’re borrowing, or trying to qualify, at a much higher rate. And most of those pre-approvals that you get when you walk into sales office, they expire after three years — they rarely last right up until closing.
I’m seeing multiple files every month going sideways. And in some cases, you’re able to negotiate — [maybe] the gap is not too large. You know, maybe the seller says, ‘Okay, I’ll meet you in the middle.’ “Now a lot of things have happened with [assignments]. One is that it’s gotten tougher to assign, primarily because the value is not there anymore. Some people bought two or three, thinking that they can just flip it without even closing. Well, if the property hasn’t appreciated that much because the market is softened, you can’t necessarily flip it, you can’t necessarily get out of the deal. And you’re on the hook to close with the builder eventually.
It’s mortgage fraud. Entering into an agreement, signing paperwork with the bank saying, ‘These are the conditions I agree to follow to obtain a mortgage’ — and then doing the opposite, is fraud.