Source: The New York Times
(New York) Some of the buyers who thought they would be moving into new condominiums in the region this year are finding that those plans are in ruins as they are being forced to walk away from the hefty down payments they made a year or more ago.
They can’t complete their deals because the mortgages they lined up before the credit crisis took hold have evaporated and they can no longer get financing.
Elizabeth and Jams Pham put all their savings into the deposit they made on a $956,990 two -bedroom apartment at Maxwell Place, a new development in Hoboken, N.J.
They signed an agreement for the apartment in 2005, put down $93,199 and were pre-approved for a mortgage for the rest of the purchase price.
But when their closing date arrived last September, several banks told them that to get a mortgage, they would have to increase their 10 percent down payment by another 15 to 25 percentage points. With no way to come up with that much money, the Phams notified the developer, Toll Brother, that they could not get financing for the apartment. Toll Brothers declared them in default and kept their deposit.
“It would take us another 15 years to save that money again,” Ms. Pham said.
Full article, “Up in Smoke: The Deposit Vanishes” March 21 2009 The New York Times