Home Builder Will Assume Payments if Buyer Loses Job

Home sales have been so lousy that an Orange County builder has revived a gimmick popular during the last recession: If a buyer loses his or her job within a year of buying the home, the builder will assume the mortgage payments for up to 12 months.

Barratt American, a British home builder, said the insurance, which hasn’t been available since the 1981-82 recession, seems to be the sort of measure that’s called for to move houses these days. “The feedback from the sales people was that potential customers were walking into the projects and telling them: ‘I’d buy if I knew I’d still have a job next week,’ ” said Joe Anguiano, a spokesman for the company.

“This is one way for Barratt to jump-start consumers’ confidence in the economy.”

Such deals were common the last time the economy went in the tank, but few builders have tried them this time around. Barratt says it is probably the only builder in Southern California offering the insurance.

One reason it is not more popular is that it could turn out to be expensive if, indeed, a number of home buyers lost their jobs in the next year.

But there may be another reason that few, if any, other builders are offering such a program: It may not work that well.

“Builders found during the last recession that what attracts buyers the most is an old-fashioned, straight-ahead price cut,” said Alfred J. Gobar, a respected Brea real estate consultant.

“That’s why we haven’t seen that many fancy gimmicks this time around.”

Barratt is pairing the insurance program with other buyer inducements at some of the company’s slower-selling projects, such as Pacific Hills, a master-planned community in Mission Viejo. For instance, Barratt will take some customers’ old homes in trade if they can’t sell them.