Here’s one banks’s solution ot the Housing Crisis and excess supply: Demolish the homes:
Here is part 5:
Victorville- The housing collapse is taking a literal form for one bankrupt housing development. Four model homes and 12 nearly finished spec homes at Bear Valley Road and Highway 395 are being demolished. The developer filed bankruptcy about 18 months ago and the foreclosed property went to Guaranty Bank in Irvine.
A Guaranty Bank official, Real Estate Officer Dean Smith, said they were facing daily fines from the city of Victorville if they didnt do something with the homes and property that not up to code. He said it was a choice of pumping their own money into property site improvements and additional money to bring the home up to code or tear down the 16 homes.
Smith said the bank is not in the building or land development business and because of the current housing market does not see anything happening with the property for at least five years.
Our only option is to either proceed with putting more than a million bucks into the land, which weve already taken a huge hit on and lost a lot of money, or, we tear down the houses, Smith said. He said the builder put up the homes before completing the site improvements and failed to have enough money to finish roads, walls, and other improvements that bring the community into code. Everything just fell apart at that point and we cant sell homes that are not up to code, Smith said.
He said the city of Victorville fined the bank once because the home are out of code and would have faced daily fines if Guaranty didnt do something with the vacant houses.
Hat tip Xeni, boingboing