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Hard times for builders in Tennessee
Monday, 15 October 2007

Shelby County Home-Builder In Deep Trouble
The Cordova-based home-builder faces 98 tax liens for thousands of dollars in unpaid bills to banks, subcontractors and vendors.  The unpaid vendors include Waste Connection of Tennessee, the owner of those filled-to-the-brim dumpsters.  The builder is advertising foreclosures on its properties in Hernando, Mississippi.  Cadence Bank, a Starkville, Mississippi-based bank, has sued Matthews Brothers in Shelby County Chancery Court for a million dollars.  The bank claims Matthews Brothers' promissory notes are delinquent.

Shelby County Home-Builder In Deep Trouble
Oct 15, 2007 12:27 PM CDT

 

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  • SOUTHEAST SHELBY COUNTY --  Touring the Stonebriar subdivisions, you'll notice a pattern forming around the upper-middle class homes, grilling parks and landscaped entrances.

    On Meadowbriar, a home has a "Sold" sign in the undeveloped yard, but the house is in the same stage of construction that it was in five months ago.  Occupied homes are surrounded by empty lots with PVC pipe that may never run plumbing.  Construction dumpsters overflow with trash that has been ignored for weeks, maybe months.

    Maybe that's because the Stonebriar subdivisions -- are Matthews Brothers subdivisions.

    The Cordova-based home-builder faces 98 tax liens for thousands of dollars in unpaid bills to banks, subcontractors and vendors.  The unpaid vendors include Waste Connection of Tennessee, the owner of those filled-to-the-brim dumpsters. 

    The builder is advertising foreclosures on its properties in Hernando, Mississippi.  Cadence Bank, a Starkville, Mississippi-based bank, has sued Matthews Brothers in Shelby County Chancery Court for a million dollars.  The bank claims Matthews Brothers' promissory notes are delinquent.

    Stonebriar residents say they can't get Mark Matthews to honor his new home warranties.

    "He says he's crunched for money," says Carilyn Daniel, a Stonebriar resident who says she and other members of the homeowner's association met with Mark Matthews recently.  "He basically says that the market is low.  He can't get people to qualify for homes.  It's just too much trouble, and he doesn't want to deal with it anymore."

    Mark Matthews declined an on-camera interview, but in an e-mail, he told 3 On Your Side his company has struggled with a brutal decline in new home sales, unscrupulous mortgage companies and unqualified homebuyers.  Below is the full text of his e-mail:

    "Many questions have been raised regarding the health and vitality of our company.  Lawsuits have been filed; foreclosures have been advertised; and more are likely to occur. 

    The steep decline in new home sales has materially affected the new home construction industry throughout the country; and our company has been likewise impacted.  Our company is not only concerned about the interests of our loyal customers; but we are also concerned about the many banks whose financial support has allowed our company to grow in recent years; and the interests of the hundreds of suppliers and materialmen who have faithfully provided our company with essential materials and services. 

    We are working with a professional team to develop a plan that will enable our remaining key personnel to stay together  in order to complete construction in progress, the performance of warranty obligations and the like.  Please understand that your bringing our challenges to light will not influence the speed with which our issues may be addressed, as we are already working night and day to best resolve them.     

    Thank you,

    Mark Matthews"

    Doug Collins, president-elect of the Memphis Area Home-builders Association, says Matthews Brothers and other home-builders "overextended themselves" on home construction in 2006.  He says they overestimated the demand for new homes.

    But Collins says the home-builders are reducing their 2007 inventories in an effort to balance the market.  He says last year, 4,259 building permits were issued in Shelby County.  As of July this year, builders have pulled only 1,569 new home construction permits.

    In subdivisions like Stonebriar, where Matthews Brothers has ceased new construction and abandoned construction in some cases, Collins says banks will step in if the builder cannot stay afloat.

    "They're going to hire somebody to come in," says Collins.  "They're going to finish the house, and then they are going to sell it, and within a year, I'd say, it's all settled back out and things are fine, but short term, there is pain."

    http://www.wreg.com/Global/story.asp?S=7207120

    See Video: http://www.wreg.com/global/video/popup/pop_playerLaunch.asp?clipid1=1838691&at1=Consumer&vt1=v&h1=Mathews+Brothers+In+Big+Trouble&d1=186967&re

     
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