[Roccus]

Don’t the banks/lenders require inspections before writing the mortgages, or do they just take the builders word?

[Hydroshock]

Some do, but if the inspectors get to tough they find that they don’t get work.

[goldstategop]

They do but its up to the buyer to order an inspection done. Caveat emptor. Don't rely on the Realtor's or contractor's assurances about the property. Get the fact-finding done first before you buy. And if the problems that do turn up don't deter you from buying the place, you can use that to your advantage by getting the price of the place reduced by getting a credit for any repairs that might need to be peformed. That's the difference between smart buyers and those who just buy a property sight unseen.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[lastchance]

NOt always. Check your state law regarding construction leins. It was very common for the banks to release the 3rd draw before the walls were even up. In Florida if a contractor does not pay the subcontractor the homeowner is hit with the bill. Even if he relied on a bank not paying till the appropriate stage of construction was completed and inspected. You can imagine the nightmare that creates for homeowners who are left holding the bag. Unless it can be proven the contractor committed deliberate fraud or other criminal acts he is pretty much off the hook.

A favorite ploy used to be, dont’ pay the subs, declare bankruptcy, agree to pay owners back at 50.00 or less per month, start a new company and get back in business. Lather, rinse, repeat.