Terrel L. Shields
Elite Member
- Joined
- May 2, 2002
- Professional Status
- Certified General Appraiser
- State
- Arkansas
A local builder who is solid as a rock and develops his own small subdivisions, builds, then sells the homes or duplexes. He occasionally keeps a duplex or four plex as a rental and might sell after running it a year or two. He has a lot of long term rentals as well in addition to a large mini-storage. He borrowed money from ANB a year plus ago and built a 30± lot subdivision. He built 2 duplexes and sold them. Built 2 more and about a week before ANB was shut down, sold 2 more and those lots were released. He was in the process of beginning two more homes when ANB shut down.
The FDIC still has his paper. They told him that he could pay 9% for 18 months and make other arrangements in the meantime or they would foreclose anyway and auction it off - not that he's ever missed a payment. The rub is that subdivisions are now toxic loans and not a bank in the area will touch them in fear of the FDIC. This will force him to refinance most of his rentals in order to pay off the subdivision. The logistics of doing so is a big headache for him.
It's bad enough on the ones that are financially weak but this is putting pressure on a lot of good builders who have good credit. Tough time to be a builder.
The FDIC still has his paper. They told him that he could pay 9% for 18 months and make other arrangements in the meantime or they would foreclose anyway and auction it off - not that he's ever missed a payment. The rub is that subdivisions are now toxic loans and not a bank in the area will touch them in fear of the FDIC. This will force him to refinance most of his rentals in order to pay off the subdivision. The logistics of doing so is a big headache for him.
It's bad enough on the ones that are financially weak but this is putting pressure on a lot of good builders who have good credit. Tough time to be a builder.