Find a home you want - check
Trust that nice realtor and homebuilder - check
Pool together your life savings and put down a deposit - check
Lose everything and have your financial life destroyed - check
Welcome to the human face of the late great housing bubble, circa 2007. Man, this has gotta suck. I truly feel sorry for regular folks who got taken in this great swindle. And there's a special place in hell for the conmen and liars who took advantage of their fellow man these past few years. And they know who they are.
Kara Homes buyers may lose deposits
Several prospective Kara Homes Inc. home buyers all but lost their deposits Monday after a bankruptcy court judge approved the sale of six uncompleted developments to developers and a bank.
An option now is to try to recover a portion of their money as unsecured creditors in the bankruptcy case, said Barry W. Frost, a lawyer for some of the Kara buyers. They would only recoup their money once secured lenders, such as banks, are paid.
Jerrold Fried, 42, of Berkeley, who put down $135,000 on a house at Kara's Dayna Estates in Toms River, is not hopeful he'll see any money.
"Unfortunately, in the end of the big bankruptcy, my wife and I are the ones that are going to suffer, and my children," Fried said. "Everybody else goes before me even though he used my money to build the development."
Of the more than 20 prospective home buyers with deposits, four buyers at Woodland Estates have signed a new contract with its new owner, Fenix, with another expected to be finalized shortly.
U.S. Bankruptcy Court Judge Michael B. Kaplan said he hopes Magyar Bank will make "similar accords" with other home buyers.
"There are no great solutions," Kaplan said. "There are no great answers."
Kaplan resisted calls by lawyers for home buyers, some of whom put down more than $100,000 in deposits, to reject the auction's results. The deposits "for the most part are the life savings of the contract purchasers," Frost said.