BusinessWeek: Built to Disappoint |
Sunday, 05 August 2007 |
Built to Disappoint
The down-and-dirty tactics of some homebuilders are now coming to light in the fallout from the end of the housing boom
By Mara DerHovanesian
So far, mortgage brokers and subprime lenders have taken the fall for the excesses of the housing boom. But now homebuilders are coming under scrutiny. Large publicly traded builders- are facing questions about deceptive sales practices, shoddy construction, false incentives that inflate home prices, and predatory lending. The FBI, the IRS, and a growing cast of lawyers, are already on their case, looking for consumer protection violations. Here are some of the more common shady practices used to deceive buyers:
Some homebuilders used a variety of tactics such as touting fancy public amenities that never come to fruitionâor threats of confiscating deposits if contracts arenât signed within a certain date
Builders sometimes crafted purchase contracts that limit the right to sue, or disclose faulty construction to the next buyer.
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