Not in this credit environment, especially when banks are looking to call deals on any convenant that is broken.
An example is a 33-year-old construction firm with an excellent track record over the years with lenders and a perfect pay history, even in these tough times.
Note how the lender treated this borrower:
“They treated me like a deadbeat who missed his car payment,” said an embittered Mr. Brown, 76. “They wanted their money now.”
“They’re not distinguishing the track records of one borrower against another,” said John Fioramonti, a real estate consultant in Scottsdale, Ariz. “If you’re a builder, you are a bad risk.”
With the pullback accelerating, complaints among builders of hardball tactics and shoddy treatment by banks are mounting, as is a general sense of betrayal.
“The behavior of the banks is unprecedented,” said Mick Pattinson, a home builder from Carlsbad, Calif. who has organized a national coalition of builders to draw attention to what they regard as unreasonable treatment. “Yes, there was overleveraging in the industry. But the aftermath doesn’t need to have been as brutal as it has been.”
“They were in chaos,” Mr. Brown said of GMAC. “We couldn’t even get them on the phone.”
Buyers were lined up for several of the homes before the bank halted construction, Mr. Brown said. But they are long gone.
“Now you talk about good business sense — the bank wouldn’t allow us to finish them,” he said. “Did the bank get millions less than if they had handled it differently? Yes.”
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