A local family of veterans claims they lost their new home and a $5,000 deposit when a builder didn't honor the terms of their VA contract.
Tammy Jones just moved into a new home but not the one she wanted.
Jones and her husband had a contract to buy a house from builder SPC Homes, but then it appraised $40,000 under the selling price.
They are Navy veterans and had a VA loan.
“The VA said they would not go through with the loan. They would not approve it for that amount,” Jones said.
Then the builder would not budge from the original price.
It was a big disappointment, but Jones said they expected to get their $5,000 home deposit back.
“Absolutely, that's what I was told by my lender, Navy Credit Union, they couldn't hold the money,” Jones said.
SPC Homes said it was keeping their deposit since there had been $20,000 in approved upgrades.
“I just feel they're trying to take advantage of somebody, because they can,” Jones said.
The couple felt protected because a VA loan has strict appraisal guidelines that give buyers a chance to walk away.
The builder and buyer signed a loan escape clause. It allows the buyer to walk away with the deposit If it doesn't appraise at selling price, regardless of any other contract provisions.
Consumer investigator Todd Ulrich went the office for SPC Homes near the airport.
“They're telling me they can't get their money back,” Ulrich said.
“You’ll have to speak to the owner,” replied a manager.
Later the company's general manager said it paid for the buyer's upgrades so it's keeping the deposit.
But real estate attorney Karen Wonsetler told Ulrich that the couple should be getting a refund.
“In this case, it's what the contract says and in this case the contract says the buyer is correct,” Wonsetler said.
Jones is considering a small claims case.
“Do the right thing and give us our money back,” she said.
Since this is considered a contract dispute, it’s up to the home buyer to take the builder to court.
It's not just VA loans but FHA loans also offer protection against low appraisals.
Cox Media Group
