A contract was signed with Marco Bay Homes to demo existing house then to build new house. The contractor took the first draw of 10% equal to $44,000. After many meetings with the owner and other prinicpals we realized that this home would never be built.
The contractor also owned the mortgage company, Olde Marco Mortgage. The closing costs were astronomical and there was a $10,000 pre-payment penalty. When we contacted the lender regarding the situation their response was 'too bad, so sad'. The interest rate was going to be raised to 11% since so much time had passed. We were backed into a corner so we refinanced and paid $180,000 more. That amount paid off the existing loan, accrued interest and pre-payment penalty. The existing house in un-inhabitable. (We readied the house for demo). The market price for the property is now over $400,000 less than our loan.
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