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Bank sues developer over home sites

Interested in building your dream home in Florida? Here’s an opportunity to buy a lot — cheap.
Wachovia Bank is suing Tampa developer Metro Development Group for $175-million, money the developer borrowed to buy distressed home lots that builders no longer wanted.
Metro Development was apparently betting that land prices would rebound, and that new home construction would be much improved by 2010. So, they borrowed millions and used the money to buy up about 9,000 Florida home lots. Home construction companies like Lennar and M/I Homes were only too glad to unload much of their home lot inventories to raise needed cash.
In all, Metro Development has accumulated around 30,000 home lots in a number of Florida communities.
Of course, as we all know now, the depth of the housing downturn is much deeper than what we may have previously thought. For Metro Development Group, that means the home lots they thought would be producing revenue by now are still languishing — and still dropping in value.
It’s not the first suit to be filed against Metro Development. Contractors, other banks and other businesses have sued Metro Development as well.
So keep your eyes on Wachovia — it may soon be the proud owner of lots and lots of lots.

Tags: Add new tag, developer, home sites, Market Trends

This entry was posted on Monday, November 17th, 2008 at 7:00 am and is filed under Market Trends, home values, real estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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