A man disposes of boxes Wednesday at dumpsters within TH Properties' Coddington View community in Upper Pottsgrove. Unfinished homes sit exposed to the elements in the background.
POTTSTOWN PA – Owners at Coddington View, the only TH Properties (THP) residential development within the Pottsgrove School District, and others who bought THP homes said Wednesday (April 22, 2009) they were talking to lawyers and planning to appeal for help from municipal officials following the builder’s announcement a day earlier that it had ceased operations.
Outside the entrance to Coddington View.
Angry, worried, confused and disheartened THP buyers and prospects, as well as those who empathized with their plight, took to Internet websites to express their feelings on the news.
One chat site, WheresBuilder.com, launched efforts late Tuesday night (April 21, 2009) to organize public discussion. By 5 a.m. today (Thursday, April 23, 2009) – only 31 hours later – it had attracted 95 members, 238 comments on 32 different topics, and more than 5,400 page views.
THP, a Harleysville PA-based builder that opened for business in 1992 and built and sold new homes across southeastern Pennsylvania and southern New Jersey, reported Tuesday it had “temporarily suspended its operations” and was “actively exploring options to restructure” the company. It blamed “the recession and the collapse of the housing market” for its financial troubles, but the company and its principals also recently were the subjects of several lawsuits.
In the wake of media coverage of the unfolding THP story, people who already occupied THP homes, as well as those who had made down-payments on them, decried their situation. Some who paid deposits of between $2,500 and $20,000 on homes not yet delivered worried their money was gone and unrecoverable. Others who make monthly payments to homeowner associations for services like trash pick-up and lawn mowing were consulting with attorneys on how to handle future installments.
In Coddington View – located within Upper Pottsgrove (PA) Township on the east side of Farmington Avenue about a half-mile north of Wilson Street – owners there were making plans to attend the May 4 scheduled meeting of the township Board of Commissioners, ostensibly to determine what help, if any, the municipality could offer.
In a message posted Wednesday at WheresBuilder.com, Upper Pottsgrove Township Manager Jack Layne attempted to assure Coddington View home owners that the municipality has made “a consistent and good faith effort to insure that adequate funding support was earmarked for road completion and other outstanding items” there. He pledged the township was “monitoring this situation very closely.”
In related news:
Activity at the courthouse. “Dozens of lawsuits have been filed against the builder in Montgomery County Court,” a Philadelphia Business Journal article by Natalie Kostelni reported Wednesday. “Some of the lawsuits were filed by companies that did work for TH Properties but didn’t get paid and had put a mechanics lien against the builder,” it said.
More to come? Wachovia Bank, which is among financial instutions that filed lawsuits against THP to recover funds loaned to the company, similarly called residential loans against affiliates of another new-home builder, Heritage Homes Group, according to an article Tuesday at GlobeSt.com. The four New Jersey-based affiliates, but not the company itself, subsequently filed for bankruptcy in January (2009), the Philadelphia Inquirer reported. GlobeSt.com writer David Jacobs speculates that Wells Fargo Bank, which bought Wachovia last year, is taking “aggressive action” to clean up the books on its acquisition.
Not quite what it hoped for. Builder Magazine, which bills itself as the “information source for the home building industry,” said in an online story Wednesday that THP last year claimed its two greatest accomplishments were “reducing debt and lowering operating expenses.” THP had “closed (sold) 385 homes in 2008 for $125 million in revenue,” Builder reported, and added the company “had projected closing 350 homes in 2009.”
Also related:
- Moving On In The THP Debacle
- What’s Next?, THP Owners Wonder
- Builder THP Suspends Its Operations
- Bank Reportedly Sues Home Builder
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The banks are really nuts. In PA the builder gives up his rights by signing a confession of judgment. The builder’s original bank gets taken over and all the promises made that the confession of judgment would not be used unless the builder is a complete screw up are not honored by the new bank. The builder is put in an impossible position, as the new bank files the judgment and ruins the builder’s credit. Hundreds of people are affected by the actions of the bank. The builder, the subcontractors, the suppliers, the homeowners who bought homes and live in the developments and people who are under contract. Instead of the bank working with the builder to stop the carnage and have an orderly way out, they just drop the bomb to get the loans off their books and get rewarded by their regulators with tarp money. If you want money from the banks now they want excessive interest and fees. The lawyers involved make money by not solving the situation as they get paid by the hour so the longer it takes the more money they make. The assets are disposed of at distressed prices, even if the developments are viable, because banks are not lending money to builders to buy them, and everyone within 10 miles of these effected developments lose 20% or more in the value of their homes because appraisers use these sales and comps for future sales. There is no political will to solve this. The builder, hopefully, will not give up and will be able to fight and win a lender liability lawsuit within the next 3 or 4 years. The people who are connected with the developments, the subcontractors and suppliers and the communities where the developments are located will be the ones who will really take the hit. Buy stock in Wells Fargo, as they are going to be rewarded handsomely for acting without any morals. They could have gone either way but the right way would have taken a little more effort. Remember next time borrow money from local community banks. If they get purchased by a bigger bank pull out your money and find a local bank who cares. Their owners live in the area and therefore have a better agenda to follow.