[angkor]

It won’t happen in the specific zip code I’ve been eying for nearly two years, since RE prices have stayed positive throughout(though down to single digit annual appreciation).

Funny, the RealtyTrac maps show nearby and newer developments with large clusters of red balloons, meaning lots of foreclosures (meaning 10, 20, and even 30 in a single new housing development). Obvious cases of developers doing some funny business with mortgage qualifications.

[DCPatriot]

It would seem to me the easiest way for builders to unload inventory would be to take advantage of the FANNIE MAE and FREDDIE MAC guidelines that allow sixty (60) days back to establish appraisal value...or change the guidelines outright.

Then, instead of offering tens of thousands of dollars in builder options and upgrades, give the builder the option to buy down the prospective buyers' mortgage interest rate to a stable fixed number.

For example, a builder could pay the mortgage company $20,000 up front to take on more risk and drop their interest rate from say, 6.75% fixed, to 5.75%.

To hell with a finished basement if it means the difference between staying or selling under duress.

[Does so]

"...Obvious cases of developers doing some funny business with mortgage qualifications..."

Hmmm. A lawyer friend should be getting out of Club Fed jail soon after doing something like that. Ginnie Maes—was it?