Couple tries to live beyond their means, banks say no and Toll keeps their $93k

[w¡n9Nµ7 §£@¥€r 123]

Elizabeth and James 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 preapproved 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 Brothers, 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.

http://www.nytimes.com/2009/03/22/realesta...agewanted=print

Some photos of Maxwell Place:

[Nagishkaw 510]

[w¡n9Nµ7 §£@¥€r 123]

Precisely. This couple with only a 90k downpayment wanted to live in a near-million dollar property. Yuppie arrogance, is what it is. They could have afforded to live a few miles away but they had to live on the water in Hoboken. Well, I don't feel bad for them. They wanted what they could not afford. And they knew the risks (or should have).

[Yoink 7]

true.... different time "everybody" was doing it... if you only have 90,000 to your name and enough to afford 3-4grand a month in mortgage you should not live in the million dollar home.

Toll Brother places arent cheap... I live in one currently and I am moving into another one in about a month

[w¡n9Nµ7 §£@¥€r 123]

Toll Brother places arent cheap... I live in one currently and I am moving into another one in about a month

Where I work all the 55+'s talk about moving into a Toll "55 or better" community like it's a badge of honor

[Nagishkaw 510]

Live within your means and pay cash for everything.

[one...two...tree 2,762]

Precisely. This couple with only a 90k downpayment wanted to live in a near-million dollar property. Yuppie arrogance, is what it is. They could have afforded to live a few miles away but they had to live on the water in Hoboken. Well, I don't feel bad for them. They wanted what they could not afford. And they knew the risks (or should have).

I don't know. This doesn't sound legal to me. For example, let's say you wanted to buy this really nice guitar for 10g's at a local music store, and they said they'd hold it for you if you put down a $1,000 as a deposit. If you back out and decide not to buy the guitar, the music store should not be able to keep the entire deposit. I think they'd have to demonstrate a loss for them by holding onto the guitar. Keeping the whole amount they put down is over-reaching and shouldn't be legal. Not for the that amount of money.

[w¡n9Nµ7 §£@¥€r 123]

Precisely. This couple with only a 90k downpayment wanted to live in a near-million dollar property. Yuppie arrogance, is what it is. They could have afforded to live a few miles away but they had to live on the water in Hoboken. Well, I don't feel bad for them. They wanted what they could not afford. And they knew the risks (or should have).

I don't know. This doesn't sound legal to me. For example, let's say you wanted to buy this really nice guitar for 10g's at a local music store, and they said they'd hold it for you if you put down a $1,000 as a deposit. If you back out and decide not to buy the guitar, the music store should not be able to keep the entire deposit. I think they'd have to demonstrate a loss for them by holding onto the guitar. Keeping the whole amount they put down is over-reaching and shouldn't be legal. Not for the that amount of money.

It's not that uncommon.

[Sprailenes 47]

Toll brothers owns the golf course I work at the development that surrounds it.

I don't feel sorry for that couple either.

[Sprailenes 47]

Precisely. This couple with only a 90k downpayment wanted to live in a near-million dollar property. Yuppie arrogance, is what it is. They could have afforded to live a few miles away but they had to live on the water in Hoboken. Well, I don't feel bad for them. They wanted what they could not afford. And they knew the risks (or should have).

I don't know. This doesn't sound legal to me. For example, let's say you wanted to buy this really nice guitar for 10g's at a local music store, and they said they'd hold it for you if you put down a $1,000 as a deposit. If you back out and decide not to buy the guitar, the music store should not be able to keep the entire deposit. I think they'd have to demonstrate a loss for them by holding onto the guitar. Keeping the whole amount they put down is over-reaching and shouldn't be legal. Not for the that amount of money.

This is probably where you learn about reading all the fine print.

[bayojona3231 4]

Elizabeth and James 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 preapproved 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 Brothers, 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.

http://www.nytimes.com/2009/03/22/realesta...agewanted=print

Some photos of Maxwell Place:

We should all be very cautious about this situation. We do not know the details of their purchase contract. As a Licensed Real Estate Broker and Mortgage Broker, I would say that they probably have you call A NON-CONTINGENT clause on the contract. Usually there are contingencies on a purchase contract. An example could be that the buyer would buy the house only if they can get a mortgage at 5.125%. Usually, you have few days to remove contingencies.

[one...two...tree 2,762]

Precisely. This couple with only a 90k downpayment wanted to live in a near-million dollar property. Yuppie arrogance, is what it is. They could have afforded to live a few miles away but they had to live on the water in Hoboken. Well, I don't feel bad for them. They wanted what they could not afford. And they knew the risks (or should have).

I don't know. This doesn't sound legal to me. For example, let's say you wanted to buy this really nice guitar for 10g's at a local music store, and they said they'd hold it for you if you put down a $1,000 as a deposit. If you back out and decide not to buy the guitar, the music store should not be able to keep the entire deposit. I think they'd have to demonstrate a loss for them by holding onto the guitar. Keeping the whole amount they put down is over-reaching and shouldn't be legal. Not for the that amount of money.

This is probably where you learn about reading all the fine print.

Fine print though should not give a company the right to rob someone of their money, IMO. This is where individual rights vs. the rights of the business clash. I disagree with the concept that a contractual agreement can trump someone's rights or that someone can just willfully sign their rights away.

This has me curious. I'll try to find any court rulings on refund of deposit money.

[Otto 83]

Headline of Topic is slanted...

There is no evidence the couple (family actually) is/was living beyond their means. The article is more about how this type of thing is happening all over - mostly due to banks/lending institutions changing their tune half way through the process (increasing down payment requirements, etc..).

[Peikko 1,575]

That's AJ for you. Whether or not this couple were about to 'live beyond their means' is not the reason why they put the deposit down and now can not pay. They were originally granted the loan so they put down the deposit.. The bank changed their mind about the loan for that deposit. The bank changed their minds and demanded a greater potion of the payment price as a deposit, another 15% if I remember rightly which they can not pay. The bank is therefor the one that changed the terms of the agreement, but the couple lose their deposit because of it. I do not feel anything for them, as I do not have all the facts but it does seem as though they are taking all the penalty when it should at least be shared between themselves and the bank that changed the terms of the agreement.

[Peikko 1,575]

It is quite possible that they will lose their current home as well because they also borrowed on the equity of that home to raise the deposit and are now in negative equity on that home too.

Although this is an extreme case, it is quite likely that a lot of people are in this kind of position, people who are trying to move up the housing ladder, quite legitimately, but who have been screwed because of the bursting bubble.