MovingForward
Wellington,#2Consumer Comment
Tue, February 22, 2011
It sounds like you signed off on a construction loan. What kind of loan was it exactly?
Do you have the documents you signed? Did you sign releases authorizing the lender to release funds to the builder?
Most construction loans have a provision for the bank to send a bank inspector to make sure the house is built to the specifications provided to the bank. That inspector is supposed to verify each stage of construction with photos and a report. Plus the contractor supplies a lien release from each of the subcontractors so the GC can be reimbursed with bank funds. In order for this house to have never been built, all of these people (you, the contractor, the subcontractors, the bank inspector, etc) would have to conspire to deceive the bank with paperwork in order to get the funds. Not just once, but each time a release was requested.
If you did not do the above, then gather your documentation and get a real attorney. Who is trying to collect the loan? Another mortgage company or a collections agency? The loan does not go away if the funds were issued and the house never built. Where did the money go - who got it?