mike morgan in florida

” . . .we're in deep doodoo."

Robert Toll, CEO of Toll Brothers



Quote of the Week – Bob hit it on the head when talking about the Fed cut this week. And it really doesn’t matter what the Fed does at this point, because we are waist deep in doodoo. The only way out is through the doodoo, and it is going to get deeper and stinkier.



Market Conditions – I’ve received many phone calls and emails asking whether I prepared an Outlook last week. I did not because I have been on the road looking at communities and speaking with brokers, analysts, builders, etc. throughout the country. I am still on the road, so this week’s Outlook will be short and sweet. Strike that. Make it short and bitter. Very bitter.

I have decided to cut back on writing weekly updates. I might write one a month, but I might step back and not write publicly anymore. My clients are keeping me busy on specific projects, so I have little time to spend a full day putting together a weekly update for public consumption. Folks, we have reached a point in this cycle that is a surprise even to me. I will provide you with a brief recap.

When I first spoke about negative sales more than a year ago I was the butt of many jokes. I have the last laugh, and I am going to make it a full belly laugh. Analysts like Kim, Oppenheim, Whelan and Zelman refused to leave their plush offices and homes. They went on builder sponsored tours instead of ground zero tours in the trenches. They saw what they wanted to see. Many analysts had to balance banking relationships, and we know what that has led to. Now it is very clear that most builders are experiencing negative sales in communities throughout the country. Negative sales are what you see when you have more cancellations than you have sales. But that is just one color of the nightmare I am going to paint . . . and have been painting for three years now.

The deterioration of the housing markets over the past six week has been devastating. I really don’t care what we hear on the conference calls this week, because I’m here to tell you from ground zero, it is much worse than anyone has discussed, and it is going to get far worse than any of the builders wants to admit.

Of the top five builders, maybe two will make it through this crash. But maybe just one. And here’s why.



Inventory – Nothing new here. These greedy pikers built more homes than the country needed . . . and they knew it. They were selling to anyone and everyone, even when they knew the buyers were not qualified and the buyers were lying on signed documents. The pikers sucked up bonuses in the hundreds of millions of dollars, all the while telling everyone that everything was fine. Now we have enough inventory for the builders to totally stop building for 12-18 months. That’s what it would take to absorb the current inventory. We all know that’s not going to happen.



Prices – If you believe anyone telling you prices are stabilizing, or even showing signs of stabilizing, you are either on drugs or you have the IQ of a green mango. Prices are now in total free fall, with buyers and competing builders in complete control. The latter is more of the driving force in prices than buyers are now. Here’s a perfect example. We visited a Lennar community where prices for townhomes were $215,000. But the sales person made it clear we should make an offer. In fact, he told us Lennar accepted an offer of $190,000 just a week ago. Lennar was willing to take a 10%+ haircut before we even saw the unit. But before you assume that is the negative to this story, read on. We left Lennar and drove to the front of the community where Prime Builders was developing a townhome section just outside the gated section where Lennar and Centex built.

Prices on Prime’s townhomes were in the $250,000 range . . . but Lennar’s townhomes were 2,200sf while Prime’s were in the 1,600sf range. So Lennar was willing to sell at $87 per square foot, while Prime is asking $156 per square foot. When I told the Prime sales agent that Lennar was selling at under $200,000, she winced and had a very interesting explanation to share with us. But the bottom line was clear. Builders are cutting each other’s throats at this point of the cycle . . . and they have no choice. Darwin would tell you this is how the world works. We are going to see extinction with a lot of blood and guts.

The townhome example I just shared is not unique. I’ve seen and heard the same thing in other markets. In fact, I don’t think any markets are immune from the builder-on-builder fight to the death. We’re seeing builders slash prices and then before a buyer can even digest the price slash, the builder is throwing in incentives, additional price cuts . . . and telling you these prices are not real, because you can make an offer!

Psssttt . . . Don’t tell the builders, but not only are they competing with each other and the flippers they loaded up, but the banks are now a very, very, very reluctant competitor in the residential real estate market. Since banks are not in the business of owning, maintaining, renting and managing single family homes, they dump them. And I mean dump. More on this for my clients.



Sales – Ara has been filling your heads with “traffic” numbers. Sure, we saw traffic, but when I “ground-zero” this traffic, I get the real story. I’d say two thirds of the traffic is a false reading. Many of the folks I spoke with are neighbors that want a feel for what is happening to the price of homes in their back yards. Another segment of the traffic is people who have sipped the Kool-Aid. They think prices have fallen far enough, and builders are making such great deals . . . that they can now afford a home. I have news for them, they can’t. Prices are still higher than five years ago and mortgage rates are not what they appear to be. Even with the 50bps cut, mortgages are tougher to get and with that comes higher rates for the folks that do qualify. Let’s face it, subprime deals and all of the creative financing we saw is gone. I’d say Ara’s Deal of the Century will soon be known as Fake-Out of the Century, unless Hovnanian cuts prices further or buys down mortgages further. Personally, I don’t buy the numbers Hovnanian released. I was in the field during his Deal of the Century, and I didn’t see what his numbers portray. I challenge Ara and some of the others to spend a day in the field with me mystery shopping their communities and the communities of their competitors.

Here’s another problem with sales. Builders are actually killing the sales they already have on the books. As builders cut prices and pile on the incentives, folks that purchased homes a year ago are canceling contracts . . . or the builders are forced to honor the current slashed prices and increased discounts. Did I say a year ago? While that is true, even sales made 2-3 months ago are no moot. If you signed a contract two months ago with a $5,000 deposit, and the builders have dropped prices $20,000, you do the math.
That means the sales we saw a year ago or even a few months ago with healthy margins, will actually be closed at low or no margins. From here on out, the majority of sales for all builders will be no and negative margins. Maybe I should color that a bit. Builders are telling you they are still at decent margins . . . exclusive of impairments. Think about that, but not too hard if you’re in the mango category. This one’s not that difficult. More on just how bad this problem is for clients, including land and spec issues that compound the sales problems.



Who Survives – I’m not sure anymore. I thought I knew based on what I see at ground zero and the numbers in the models, but now I am turning over rocks and finding slimy, stinky stuff that is going to feed the slide to the sewer. There will be three groups of survivors.

Smart Guys – These are the guys that have managed and continue to manage down inventory, and are shutting down operations like a frog shuts down during the dry season. The faster these guys can get out of sight into the soft mud, the healthier they will be when the rains return. From what I see now, there are only a handful of these frogs out there right now.

Bullies – These guys have the arrogant attitude that they can build their competitors out of business. They may have Einstein IQs but there super-egos smush out any clear thinking of what is best for the company. These blockheads announced plans to build and compete aggressively on pricing. They thought they could continue building and dropping prices to force the competition out of business. Some of these knuckleheads still believe this. But the bullies never left their comfy offices and the comfort of their boats, beach/mountain homes and vacations. They just didn’t get it. I’m not saying that sarcastically. These CEOs and other execs were (and are) so full of themselves, that they missed the heart of the problem, and instead of taking their foot off the gas pedal, they pushed it to the floor. They felt they could go through the wall with more speed. If they had bothered to take a ground zero look before heading for the wall, they would have seen two things. The wall is not two feet thick. It is twenty-two feet thick and it is reinforced with rebar.
There might be one or two bullies that survive. They will not make it through the wall. They will come out the side, in pain, with broken bones and a big hurtin’ to their vain pride.



Crippled Fools – This will be the largest group. There are builders out there with no cohesive plan for sales, marketing, customer service or how to navigate the mines. They've grown too big and swallowed up the good and the bad. They now have severe indigestion and they are so fat and sloppy, they can barely move. It will be hit or miss for these fools, since they have not taken the time to sit down and formulate a plan. There is a big difference between being “reactive” and “proactive.” The first two groups are being proactive, even if the brains of the bullies have the density and contents of a coconut. The crippled fools will come limping out of this two ways. If they lose a leg or two, they will come out with a partner or two who may have only lost and eye or an arm. The second group will come out, but will probably shrivel up and die.



Who and What to Buy – No one, yet. The big boys can’t buy any of the builders, since the Street has not priced in the reality of the twenty-two foot, reinforced wall. The big boys can’t buy the debt, because the debt is also overpriced. I’ve had several calls from deep pockets that want to step in with a checkbook. My advice is simple. Wait. Look, touch, smell, don’t taste, squeeze, poke . . . giggle and wait. More specifics on who survives and who to watch for clients.



Florida – I have been on the road in Florida since my return from New Jersey. Let me cut to the chase. Bad. Ugly. And getting worse. Much worse. I hope that is enough color, because if you don’t get it, you never will. If you are a Stephen Kim or Dan Oppenheim follower, and you think the bad is getting better, you need a good smack up the side of the head and a kick in the pants. And as Forrest would say, “And that’s all I have to say about that.”



WCI – You’ve got to see Bal Harbour to believe it. The CO promised for the end of August is nowhere in sight. The building is still under construction. Prices continue to drop. I’m here to tell you this one doesn’t close this year and the can-rate is going to be ugly. I also hear the attorneys grumbling, so for the bankers expecting cash this year, think again. In fact, you guys might need a couple mangos, a couple coconuts, some ice, and a bottle of vodka. Throw these in a blender and suck it up boys. If you’re on Oceanside too, you might want to go to the top of the building and open a window.



New Jersey – I visited the Mid-Atlantic this week to look at a few areas. Let’s start with the Jersey Shore and Asbury Park. I actually grew up on the Jersey Shore and attended Asbury Park High School. It’s the home of Bruce Springsteen and it was a jewel back in the 20’s. Just one hour from New York by train and with a mile of beautiful beaches, you’d think this area would have sprung back to life.

Unfortunately, ever since 1969, Asbury Park has been on a slow and steady decline. The shops closed and moved to the regional malls. The old hotels of the 20’s became less and less attractive to summer vacationers. And the state started dumping mental health patients in the rooming houses and old hotels. Johnny Cash and many others sunk money into projects to revitalize the beach district of Asbury Park. They all flopped. How can you expect buyers to return, when seedy hotels, boarded up buildings and worse, are just a block from the planned condos and hotels.

So a few years ago at the height of the housing bubble, a new group stepped in with big dreams and bigger promises. I drove past newly constructed town home projects that were totally empty. I drove past several mid-rise condos that are going up on Ocean Avenue, and right across the street it looks like a war zone with dilapidated buildings. The boardwalk has been repaired, but without the shops of the 60’s and 70’s, it is nothing more than a hang out for bums and kids with nowhere else to go. It’s sad. Very sad.

For my clients, the photos speak for themselves. For the good folks reading this piece, I have included a photo of what the buyers of the condos are looking at, if they close and move in. I doubt anyone will move into some of these towers. And just like other projects in Asbury Park, they will either eventually be torn down or filled with welfare and displaced mental health tenants. Unfortunately, that’s just the way it is in Asbury Park.

Whenever I return to the Jersey Shore, it’s great to see all of the great things happening. It’s sad, but never unexpected, to see failure after failure in Asbury Park.

At the other end of the State, we have Atlantic City. Several clients have asked me for information on what it looks like at ground zero and what’s ahead. It’s quite simple - Atlantic City has seen better days. AC saw better days in the 20’s just like Asbury Park. But AC got another shot in the arm with gambling. As many of you know, I was an executive with the Trump Organization in Atlantic City in the 90’s. Even then, if you walked one block away from the casinos, you were in another world. One of desperation, cheap hookers, street vendors (drugs) and run down buildings. Not much has changed, and any hope of Atlantic City turning things around has disappeared. Gambling in Pennsylvania has already hit Atlantic City hard, and PA is just getting it together. I don’t expect any new casinos in Atlantic City, nor do I see the potential of any new investments that will help the industry or the surrounding communities.



Blowing Smoke Article of the Week – The Wall Street Journal’s Mike Corkery does it again, as he touts the virtues of the return of Ivy Zelman. The title of his article is fitting, “Expert on Housing Has Her own Nest.” More on the nest in a moment. Corkery makes it sound as if Ivy led the way when it comes to the housing issues. Well . . . before you run out and plunk money down on Ivy, I can assure you she came to the party reluctantly and very late. She also had a rather sloppy track record for quite a few years prior to leaving Credit Suisse.

Analysts like Ivy and the giant financial institutions these analysts worked for, may have played a larger role in the housing issues than one might think. While analysts were touting the virtures of the builders and bankers were putting together CDOs, SIVs and other packages, there were very few voices talking about the clouds forming. Personally, I can't seem to balance how the analysts refuse to paint the true picture, while the banking side continues to fund the problem. And isn't it funny how Credit Suisse just put on a housing conference, providing the builders with a global forum to sing their song . . . without anyone to ask the hard questions.

As for the ground zero issues brewing over the last few years, Ivy tapped into me for quite a bit of information about the housing industry late in the game, but she never left the “nest” to come out and see ground zero. Ivy ran around on the guided tours offered by the builders, but that’s like asking a bank robber for a tour of the crime scene. With her team of cracker jack research analysts, she had massive amounts of data she could pump out. But having rear-view mirror data, and not being able to marry it to what is coming down the road is a major problem.

Ivy was socked away in her “nest” with her three pre-school children, while her research team was in New York and the builders were building in Florida, California, Arizona, Nevada, etc. And as Quirky Corkery points out, she will continue to work from her home in Cleveland, while her team remains in New York. The problem is . . . there’s not much going on with housing in Cleveland or New York, and using your kids as an excuse for not being able to get out in the field may have worked with Credit Suisse, but might not cut it in the real world.

Let’s forget about Ivy coming to the party late and failing to get out in the field at ground zero. Let’s look at the record. I asked Ivy why she didn’t come out and simply downgrade builders across the board. I asked why it seemed like she would downgrade one and upgrade another, and why she seemed to be almost neutral in her ratings. For those of you that know the game, her response will come as no surprise. Ivy told me she Credit Suisse required her to maintain an overall rating on the builders and she couldn’t simply downgrade them across the board. Maybe banking relationships are more important that coming out with what’s really happening and what the real long term fall out will be.

Analysts that sit in their offices (or at home with the kids) and think they can provide relevant information, are kidding themselves and their clients. Ivy comes across great on conference calls and she pumps out a lot of information. She’s a tough cookie, and I was always a bit shocked at her truck driver language on the phone, but her rear view analysis was not much different from the rest of the group. Coming across tough and pumping out volumes of data is not a replacement for field research and counter balancing what the builders tell you with what is happening – real-time in the real world.




Disclosure

Absolute Capital Hedge Fund Suspends Withdrawals

By Laura Cochrane and Stuart Kelly

July 26 (Bloomberg) -- Absolute Capital Group Ltd., an Australian hedge fund that invests in collateralized debt obligations, suspended withdrawals from two of its funds after forecasting losses amid a rout in U.S. subprime mortgages.

The firm froze its Yield Strategies Fund and Yield Strategies Fund NZD, which together have about A$200 million ($177 million) under management, Chief Investment Officer Bill Entwistle said in an interview today. The Sydney-based company is 50 percent owned by ABN Amro Holding NV's Australian unit

Absolute Capital, which says it doesn't invest in the riskiest portion of CDOs, is suffering from the widening impact of delinquencies on U.S. home loans to people with poor credit. Basis Capital Fund Management Ltd., another Australian hedge fund battered in the North American market, has hired Blackstone Group LP to negotiate with bankers to help it limit losses.

``Because of the contagion from subprime, all of the credit sectors are re-pricing,'' Sydney-based Entwistle said. ``There are lots of sellers and no buyers, the market has to settle down before we can get some clarity.''

The Yield Strategies Fund returned 6.4 percent the past year while the Yield Strategies Fund NZD, which started in May, gained 0.2 percent to June 30.

Australia's hedge fund industry has been rocked by losses at Basis Capital, which has said the value of its Yield Alpha Fund may plunge more than 50 percent if its assets are sold at distressed prices. Sydney-based Mariner Bridge Investments Ltd. on July 20 wrote down the value of its U.S. residential mortgage-backed securities.

Biggest Investors

The nation's 20 million people are the world's biggest investors per capita and Australia has the fourth-largest managed funds industry. Unlike in the U.S., where only qualified investors can place money in hedge funds, Australia allows individuals to invest in the vehicles.

Australian hedge fund managers directly controlled A$41 billion in assets as of July last year, the most in Asia, according to AsiaHedge. Assets almost tripled in the two years to June 2006 as money from compulsory pension savings, tax breaks, a new state-owned investment fund and takeovers boosted fund inflows, according to government data.

Absolute Capital said it won't process any requests for withdrawals until Oct. 25, estimating it may take three months for enough buyers to return to the CDO market.

Repackaged Debt

CDOs pool assets ranging from investment-grade debt to high-yield loans, and repackage them into bonds. Different portions of a single CDO have their own rating, ranging from as high as AAA to nothing at all.

Entwistle said 50 percent of Absolute Capital's two funds is invested in the so-called ``mezzanine'' portions of CDOs, which are typically assigned the second-highest non-investment grade rating of BB by ratings companies.

Basis Capital's investments included the unrated portions of CDOs, the first in line for losses when borrowers fall behind on mortgage payments.

``There's probably more pain to come,'' said Michael Birch, who helps manage $133 million at Wallace Funds Management, a Sydney-based hedge fund. ``We need more clarity as to the scale of the writedowns at Basis and Absolute. It might take six months for the full impact to come out.''

The sting from U.S. subprime mortgage delinquencies that hit a decade-high this year is being felt across businesses, regions and asset classes.

Buyers Vanish

Almost 40 companies have reworked or abandoned debt offerings in the past three weeks as after struggling to find buyers. Federal Reserve Chairman Ben S. Bernanke said July 19 there will be ``significant financial losses'' from risky mortgages, pointing to estimates as high as $100 billion.

Bear Stearns Cos., the fifth-largest U.S. securities firm, on July 18 told investors in its two failed hedge funds they'll get little if any money back after ``unprecedented declines'' in the value of subprime mortgage securities.

Investors earlier this month were demanding an extra 10.5 percentage points in yield over benchmark rates to own some of the lower investment-grade rated parts of CDOs, up from about 3.1 percentage points in July 2006, according to data compiled by Morgan Stanley.

Sales of CDOs surged to $503 billion last year, compared with 2003. Investor appetite for the securities is now waning. Analysts at New York-based JPMorgan Chase & Co. said CDO sales in the U.S. this month reached just $9.1 billion at July 20, compared with $42 billion for all of June.

Ratings Criticized

Ratings companies have been criticized by investors for not acting quickly enough to the subprime mortgage crisis. Leah Rhodes, a Melbourne-based director of structured finance at Standard & Poor's, today said losses from U.S. subprime loans ``did exceed our expectation.''

A spokeswoman for the Australian Securities and Investments Commission, the corporate regulator, didn't immediately return telephone calls seeking comment on Absolute Capital.

Kim Ivey, chairman of the Australian Alternative Investment Management Association, which represents 80 of the nation's hedge fund managers, said there will be more hedge funds hurt by the subprime market.

``I expect that it will be contained to just a handful,'' he said. ``More of a concern is what will happen once the fallout moves from the subprime sector to more senior debt, when many more managers have exposure.''

Building Homes in Florida --- a nightmare

Building in Cape Coral a Homebuilders Perspective

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Where do I begin with this mess?
We are homebuilders in the cape, and cannot believe what is going on out there. The general public and Florida lawmakers need to be aware of this situation.
If you drive around the cape and see alot of unfinished homes, have you ever wondered how that transpired? Well, let me tell you!
Situation #1 Customer comes into the builders office and wants to sign up for a home. Customer signs on the dotted line, gets there loan.....sometimes the bank is on the NOC/sometimes not! The price of the home is divided into 5 draws. Builder gets a deposit draw does work, then gets another draw.
Builders are having subs do work, getting draws, and then not paying subs.
Subs file liens, title co does not do title updates, builder gets other subs to finish trimouts etc. Builder gets another draw. Now the builder is 75% done with the home. Builder has profited (example 350k home w/out lot price in there)
$280k builder maybe paid for some earlier subs work, say concrete and site work 40k
builder now has $240k in his pocket. Bank isn't aware, homeowner has gotten
a few nto, but builder says its standard proceedure, that bill was paid etc.
Now bank has a title update! Bank says no more draws....there are liens out there. Customer wonders why there is not activity on there home, now that
there interest payments are getting larger based upon amount borrowed.Bank does not relay no draws to builder to homeowner. Homeowner has never built before and isn't sure of building time frame.
Builder then decides to exit. The property has 140k of liens to subs,
some subs didn't file nto/per builder request? and the property is 70k away from being completed. Now a new builder tries to complete it.
plus the liens have to be contested , paid, or neg. The new builder goes out to bid.
New builder checks property and the soffit panels are missing for scrap metal
$500, The a/c copper lines have been cut $500, a couple cabinets are gone
$300 and the pocket sliders have been ripped out taken into a bedroom and the glass broken out and the frames and used for scrap metal. with a rock, (that the vandals just left on the floor, with the broken glass) a bathrom door is missing $50.
Why aren't the police checking for "new metal slider frames: at scrap yards?
There are areas with 200 properties that are going through this right now!
The builder comes in with a price of say 85k to finish.
Bank has 70k draw money left, new builders bill is 85k to handle the mess, and warranty work that has been done by numerous subs he didn't know, and
several subs doing electrical, in some cases three companies completing one house's wiring.
So at the end of the day, the homeowner has a lot he bought for 100k,
had a builder build a 350k home on it. So instead of the homeowner having a 450k dream home, this is what he has........

a lot for 100k
a home 75% complete
a home with 140k liens on title
a new builder who will finish for 85k
draw money left in loan 70k
amount buyer must come up with to finish home 15k
liens contested, some stay,some go away
to leave a balance of 90k

Now builder has helped client get everything on track, homeowner borrowing against his personal credit lines to pay liens and come up with the shortfall
of what is needed to complete construction.
Now bank says"the borrower has gone over the aloted time for construction,
now we have to protect ourselves, and at our discretion, we will need a new appraisal and will requalify borrower for the loan. If the home does not appraise for the loan amount, we will need to put that borrower in default".
That came from a bank that has written loads of loans in cape coral.
The market has taken a nose dive, the homeowners lot has gone down say half of its value,.....mr banker, I can tell you now, that it will not appraise for what it did a year ago!
So what does this homeowner do?
He has a home that he double paid for on some subs work.
Essentially he has a home that has cost him 100k lot
350k const 90k liens 15k to finish over draws left=$555k home and lot
that will appraise in todays market at about $370k
So he is upside down $185k, instead of the 80k in todays market.

So the cape has hundreds of these homes scattered around from other builders doing the same thing, leaving the homeowners in a bad situation.
Where is the previous builder? Well he is still building! By the way, he built
a mini mansion for himself and didn't pay subs on that either......but his home got a CO, where as the (9) homeowners we are working with didn't get their CO, just problems. Plus he has the cash from the draws.
This needs to stop!!!!
This is the atmosphere in the cape-
Hundreds of half finished houses, hundreds of empty new houses just sitting vacant, 19k homes for sale oin lee county. Eight hundred forclosures last month.
When I drive around the cape north of veterans, and see all this, like the lady I saw struggling to put out the last of her belongings , she couldn't take with her.....(she was probably losing her home) it gives you an earie feeling that
I have never experienced in my life before.
Ps, another builder who did this has started a new company in the cape, and a bank just loaned him over a million to build his personal home!
After checking more closely on this one, he changed his first name on his license to the state, but forgot, and put the first name he used on his old license on the NOC of
his new mansion being built.
This builder left his homebuyers in forclosure, didn't finish homes, we could not even help them!
They only had home loans for the under 200k range.
What is this ............people are getting two loans and one closing to avoid the pmi insurance. That insurance is so if the homeowner defauts there is something for the bank to fall back on to resell the property.
Ps, even the million dollar loan has this. Who is allowing this behavior.
I like cape coral, but all of this is wearing on us, and it leaves us wondering
what is coming down the road. What happens when the lenders go under?
Helping these people move forward is somewhat rewarding, with alot of
problems at every turn most loans take 2-3 months each to get on track. My emaillog is the thickness of a phonebook!
It is very frustrating when the lender gives you the title co name, and they are out of business, and then you go through three more to finally get the
one who is still in business, and they are handling the work from 3 out of business locations so it takes weeks to get anywhere.
We called a homeowner last week to give them a heads up about ther home
with liens and that they might want to look into it. We told them they are so far under we cannot help them, they stated that it is under control.
Some builders advertise a cheap price and rob peter to pay paul.
As long as new deals are signed they can go on for a very long time, until
no new deals are signed, then someone is left holding the ball.
We can have a sign telling homeowners that we can build there home for
100k, but after the builder starts nearing the end of the job and the house costs
150k to build, as long as the builder signs new deals and subs are floated
payment it won't catch up until new deals are not signed.
Each deal I have worked, the identical home has ranged in price(construction price only) same areas of town, same options,and time frames 20-30k.
What does this tell you? Someone was building for cash flow only.
Maybe with a home builder in high places, this will all change.
P.S. These homeowner are too distraught with what has happened to them they never file anything against the builders.
Some I have worked with are on their 2nd or 3rd builder on one house!!!