January 2008 News Archives

Thursday, January 10, 2008. FL: UPDATE: Pot-growing suspects face fraud charges UPDATE on Global Home Builders' marijuana grow houses case

Thursday, January 10, 2008. US: KB Homes Betting On Countrywide Just As Market Kills It Jeffrey T. Mezger, CEO KB Home

We have capitalized on our unique strategic partnership with Countrywide to provide attractive mortgage programs for our buyers while minimizing our exposure to defaults.

Thursday, January 10, 2008. TX: Activist gets probation, $4,000 fine Janet Kay Ahmad, founder and president of HomeOwners for Better Building, was accused of placing a fake bomb in a vacant lot at South Ridge Hills addition in south Arlington and of making a false bomb call to police in January 2002.

Ahmad was accused of calling 911 to report that a bomb had been found in the 7500 block of Cresswell Drive during a tour of the area. She was in North Texas to speak about homeowners' fears concerning revelations that KB Homes built the subdivision on a Navy bombing practice site that was active during the 1940s and 1950s.The jury found Ahmad not guilty of filing a false report and not guilty of planting a fake bomb. Ahmad, 65, was sentenced to one year's probation and ordered to pay a $4,000 fine.

Thursday, January 10, 2008. FL: Builder's Collapse Devastates Florida Community More on Levitt & Son's Bankruptcy

Thursday, January 10, 2008. US: Lennar's new homes fetch 60% less as market slump deepens That's how much Morgan Stanley Real Estate paid for an 80 percent stake in the 32 communities, 60 percent less than the price at which the properties were valued just two months earlier. That's also what some investors say they would pay for distressed land, condominiums, homes and whole developments, whether it's now or later this year.

Thursday, January 10, 2008. US: Builder WCI's Liquidity In Question After Stock Plunge Analysts fear that WCI, which has been hit hard by the condominium crash in Florida, may be forced into bankruptcy if it isn't able to renegotiate terms and modify covenants with its lenders. Other home builders socked by the housing downturn and the credit-market turmoil have been required to obtain waivers from creditors

Thursday, January 10, 2008. US: UPDATE on Levitt and Sons bankruptcy U.S. Bankruptcy Judge Raymond B. Ray on Thursday rejected about two dozen contracts at the buyers' request, but he warned those whose deposits weren't placed in escrow that it's too soon to know how much -- if anything -- they will get back.

Thursday, January 10, 2008. US: Binding Mandatory Arbitration Reform Most consumers have no choice but to submit to arbitration or else give up necessary products, services, or employment opportunities...

Thursday, January 10, 2008.Insiders out of work Also hitting the streets are high-paid home building executives, engineers, architects, appraisers, underwriters, escrow workers, loan processors and real estate brokers and agents. Former loan consultant lost home in foreclosure, writes "History of mold" on garage door, gets work as a foreclosure prevention counselor, (see photo caption).

Wednesday, January 09, 2008. OH; KY: SMI NEW HOMES SOLUTIONS SUED BY TWO BANKS OVER $3.8 MILLION IN LOANS Two banks have filed liens against SMI New Homes Solutions in Kenton County Circuit Court, claiming the Northern Kentucky home builder has defaulted on more than $3.8 million in loans.

The move comes less than a month after FBI agents executed a search warrant at SMI's Covington office and more than 25 liens were filed against the home builder

Wednesday, January 09, 2008. AR: Local Housing Sector Loses More Builders Builders filing for bankruptcy (or trying to) include "Builder of the Year" McMahon Brothers Custom Homes. Others: Legacy Building, Gene Knight Homes, Aaron Nickell.

Wednesday, January 09, 2008. IL: UPDATE: Help for homeowners Homeowners living in Neuhaven, Deercrest and Clublands subdivisions expected to see increase on property taxes due to Neumann Homes bankruptcy.

Wednesday, January 09, 2008. US: Fraud fuels mortgage crisis In an eye-opening setback for prosecutors, Deering and other defense attorneys successfully defended three home builders against charges that they participated in the scheme. Prosecutors had attacked the home builders for failing to raise red flags when they witnessed mortgages being issued far in excess of what the builders were being paid.

But some defense attorneys went on the offensive and attacked lenders for failing to guard against fraud.
...Of course, the Atlanta scheme wouldn't have worked if not for appraisers willing to approve values far in excess of what builders were charging for new homes.

Wednesday, January 09, 2008. Business Week: Dirty Deeds The mortgage crisis has blighted the landscape with boarded-up houses. Now a few cities are holding giant lenders accountable for what foreclosure leaves behind

Tuesday, January 08, 2008. NC: Charlotte FBI site, Dept of Justice press release Scroll down to Mortgage Fraud and Mortgage and Bank Fraud: "The convictions of Cloud and Russell followed the guilty pleas of 19 coconspirators, including three attorneys, five mortgage brokers, an appraiser, four promoters, two builders, two recruiters, and a bank insider."

Tuesday, January 08, 2008. OR: Letters, Jan. 8: Building in wetland puts plenty at risk People depend upon city building regulations to protect them from shoddy construction that would lead to unsafe houses and high repair bills. Yet when they go house hunting, few think to ask about the possibility of flooding.

The developer who builds on a flood plain walks away after the houses are sold.

Tuesday, January 08, 2008. MN: Builders forced to auction off hundreds of new homes Auction company couldn't auction off homes from builders in bankruptcy or those who owe subcontractors too much. Some properties didn't have clear titles.

Tuesday, January 08, 2008. TX: UPDATE: Case of the fake bomb goes to trial The neighborhood was built by KB Homes on what had been a practice bomb range used by the Navy during World War II. There are published reports of practice bombs found in the neighborhood.

The issue is whether Ahmad (Janet Ahmad of Home Owners for Better Building--HOBB.org) planted a bomb in a lot on Jan. 26, 2002, two days before she was scheduled to speak at a public meeting on the neighborhood bomb issue.

Tuesday, January 08, 2008. US: Do You Have A Plumbing Part Known As A Kitec Brass Fittings In Your Home? A class action lawsuit has been certified in Las Vegas, Nevada (case number A#493302) related to Kitec brass fittings. The Homeowners Consumer Center is trying to discover if homeowners in other cities, or states have had any problems or issues with this plumbing product.

Tuesday, January 08, 2008. FL: Manatee plans to fire inspector for taking gifts Taking gifts from builders was normal, he said

Tuesday, January 08, 2008. SC: UPDATE: Bankrupted company leaves buyers homeless Levitt & Sons, a unit of the Levitt Corp., ran out of cash in October and declared bankruptcy in November

Tuesday, January 08, 2008. WA: Seattle housing development may have contaminated water Residents of government backed development are about to learn their heating systems are malfunctioning and their drinking water may be exposed to lead.

Tuesday, January 08, 2008. KS/MO: More on MILLER case which has been going on for several years Brumble acknowledged working for Miller at Maplewood Real Estate... (Readers can post comments at end of article.)

Tuesday, January 08, 2008. KS/MO: UPDATE: F. Jeffrey Miller case: Co-defendant pleads guilty in mortgage fraud scheme Judy Brumble, 58, of Lee's Summit, admitted to prosecutors that she had worked with Miller and real estate agent Todd Earnshaw and other defendants to fleece mortgage lenders with bogus loan documents.

Miller, former head of Miller Enterprises and Star Land Development, once ran one of the leading Kansas City-area home builders in 1999 and 2000, according to a 2006 indictment.

His business ran afoul of the law when he created a pair of companies -- Associated Capital and Associated Finance -- that allegedly created falsified documents and provided closing costs and down payments to customers with weak credit without the lender knowing it.

Tuesday, January 08, 2008. Forbes: The Housing Horror Show Housing industry continues to disappoint

Tuesday, January 08, 2008. US: Countrywide shares take another hit Shares of Countrywide Financial Corp. plummeted after New York Times reported mortgage lender fabricated bankruptcy documents.

Tuesday, January 08, 2008. US: KB Home loses $773 million CEO is gloomy

Monday, January 07, 2008. Kansas City Star--Paul Wenske: Don’t put all the blame for subprime mortgage crisis on the borrowers There is an erroneous assumption that inexperienced or first-time homebuyers simply woke up one morning and decided irresponsibly to buy houses knowing they weren’t financially qualified to do so.

Monday, January 07, 2008. MO: Missouri legislation would crack down on some subprime lenders Experts say aggressive mortgage brokers failed to follow good underwriting principles, more intent on making quick profits than in making high-quality loans that ensured long-term home ownership.

Monday, January 07, 2008. CA: As housing crisis deepens, developer defaults grow in Kern County But experts caution that people looking for a deal on defaulted or foreclosed properties should be careful: some properties could carry hidden liens and lawsuits from unpaid builders. [Should also be thoroughly checked for defects. --Ed.]

Monday, January 07, 2008. FL: Court orders insurers to pay At issue: Whether a standard policy clause means an insurance company has to pay a builder for damages that result from shoddy work done by a subcontractor.

Monday, January 07, 2008. MI: A tough year for residential developments Bay View development fighting nine lawsuits; director of Morgan Farms, Bob Fenton, remains optimistic about the development despite a foreclosure notice; etc.

Monday, January 07, 2008. OK: Oklahoma City homebuilder sentenced, fined Michael Ray Todd sentenced to one year in prison and required to pay $1.9 million in restitution for failure to file a federal income tax return....As part of a plea agreement, the U.S. agreed not to prosecute Todd for bank fraud allegedly arising from the creation of false and fraudulent invoices submitted to customers for whom he was building homes.

Monday, January 07, 2008. US: Wall Street: Always an insider's game It is a felony under federal law and has a long, dark history. It is nothing more than the privileged and well-positioned taking advantage of secret information to profit at the expense of ordinary investors...At home builder Toll Brothers, top insiders unloaded 14 million shares for $612 million, before revealing slowing demand and a decline in orders that caused that stock to plummet from $56 to $33, costing shareholders $3.5 billion.

Monday, January 07, 2008. TX: Fake-bomb case from 2002 about to go to trial Janet Ahmad of San Antonio, national president of HomeOwners for Better Building, is accused of calling 911 to report that a bomb had been found (in a KB Home development).

Monday, January 07, 2008. TX: Trial begins for woman accused in fake bomb case Defense attorney Mark Daniel characterized the case as “as retaliatory effort by KB Homes,” which also has sued Ahmad for $20 million.

Daniel said Ahmad did nothing more than find a bomb where bombs had been found before and called 911 as residents who found bombs had been instructed to do.

Monday, January 07, 2008. US: Americas Watchdog Demands Banks and Mortgage Bankers Dislose The Yield Spread Premium Kick Back Group calls current proposed Congressional mortgage reform a "pathetic joke," inspired by campaign contributions from banks, mortgage bankers & homebuilders, that will continue to hide the most outrageous mortgage fee for nearly all US homeowners.

Monday, January 07, 2008. LA: KB Home violates contract National homebuilder KB Home has scrapped 35 planned market rate homes in River Garden, the mixed-income development that replaced the St. Thomas housing project in New Orleans.

Friday, January 04, 2008. CA: Stakeholder sues builder for $19.8M Stakeholder William Niemi, former president of (now bankrupt) Dunmore Homes, accused builder Reynen & Bardis of defaulting on $19.8 million obligation.

Friday, January 04, 2008. US: Builders Going Bankrupt Causing Losses for Investors Investors/buyers should put deposits in escrow, should not agree to release deposits until closing. If company resists, that ought to send up red flag.

Friday, January 04, 2008. AZ: Bankrupt lender First Magnus auctions off $16.7 million in construction loans Home buyers attended hearing: concern that sale would strip them of legal rights after being left with partially-built homes.

Friday, January 04, 2008. US: TOUSA misses interest payment Builder lost 99 percent of market value...considering bankruptcy.

Friday, January 04, 2008. SC: UPDATE: Court date approaches for bankrupt builder of Murrells Inlet neighborhood Levitt and Sons bankruptcy

Thursday, January 03, 2008. MI: Governor may sign builder law Comments may be posted at end of article.

Thursday, January 03, 2008. US: Subprime Loans: Who Benefited, and Who ELSE Benefited Subprime industry lobbyist headed several industry-related trade groups that sported names even a fiction writer would be too embarrassed to concoct. My favorites was -- are you ready? -- the "Responsible Mortgage Lending Coalition."

Thursday, January 03, 2008. CA: New 2008 Construction Laws Provide Added Protection for Consumers About two dozen changes to California construction law become effective Jan. 1.

Thursday, January 03, 2008. US: States unveil mortgage licensing system Nationwide Mortgage Licensing System: online database will make it easier for states to monitor mortgage companies.

Thursday, January 03, 2008. US: Lawsuits Soar Over Subprime 43% jump in the number of securities fraud class action lawsuits last year...New York City itself has gotten into the lawsuit game, with the city's retirement and pension funds for city workers filing lawsuits against mortgage lender Countrywide Financial Corp., claiming the lender misrepresented the risk of its mortgage-backed securities.

Thursday, January 03, 2008. US: American Home Mortgage's Intention To Destroy Files Raises Ire Destruction of the paper files could create trouble for American Home borrowers, compromising their ability to file lawsuits against the Melville, N.Y., company, Ms. Stapleton said in papers filed with the U.S. Bankruptcy Court in Wilmington, Del. American Home, which collapsed into bankruptcy in August, is selling its assets and going out of business.

Thursday, January 03, 2008. US: Back to the future to cure the mortgage scandal? Villain hidden in plain view: heavily lobbied federal government that lost sight of ordinary Americans' interests.

Thursday, January 03, 2008. MI: Legislation mandates training, targets unlicensed builders The quartet of bills signed by the governor two weeks ago signal a turning point for the residential building industry, which will face new education requirements and higher licensing fees June 1, plus much tougher enforcement effective immediately.

Thursday, January 03, 2008. AR: Banks Foreclose on Brandon Barber Condo Project Contractors with claims totaling more than $1.1 million have filed liens

Thursday, January 03, 2008. SC: Action 9: Man Can't Get Deposit Back On Home Builder's lender was apparently part of the problem; Action 9's involvement may have played part in builder's eventual decision to return deposit.

Thursday, January 03, 2008. AZ: UPDATE: Ballot measure would require home warranties Initiative aimed at giving home buyers more rights to sue builders over construction flaws is a veiled attempt at union organizing, according to a construction-industry representative....The initiative is crafted to repeal some of the provisions of a 2002 law pushed through the Legislature by home builders to shield them from lawsuits.

McCracken said the ballot measure does preserve one section of that law that requires homeowners and builders to try to work out problems before a lawsuit can be filed. But he said the rest of the law has to go because it essentially has made it impossible for homeowners unable to reach an accord to then take their cases to court.

Thursday, January 03, 2008. AZ: HOA denies homeowner solar panel use due to color "They encourage people to use solar, then they stonewall you every step of the way,"

Thursday, January 03, 2008. GA; Nat'l interest: 'Extreme Makeover' builder seeks protection Oakwood Homes LLC, which served as the builder for an ABC's "Extreme Makeover: Home Edition" project last January, has filed for bankruptcy protection...does not expect to have funds to pay unsecured creditors.

Thursday, January 03, 2008. FL: UPDATE: With Builder in Bankruptcy, Buyers Are Left Out Buyer has $88,820 deposit tied up in Levitt and Sons house they can't close on due to builder's bankruptcy.

Thursday, January 03, 2008. US: UPDATE: Customers taking bankrupt Levitt & Sons to court deposits range from about $25,000 each to around $58,000.

Thursday, January 03, 2008. US: A 'Realistic' View of Lennar's Solvency Bring in reality and the real world, and they have no real equity value per share, for they have not equity.

Thursday, January 03, 2008. KS; OK: UPDATE: Brown presses for action against contractor Al Soulek, owner of Oklahoma City-based AAA Renovations; OK Attorney general may drop six fraud charges if Soulek agreed to avoid future complaints of fraud...

Thursday, January 03, 2008. PA: Built on sand How a bankrupt contractor left behind unpaid workers, unfinished projects: Craig Heffernan, Heffernan Construction and Supply

Thursday, January 03, 2008. US: Builder Levitt & Sons' bankruptcy kills retirement dreams for many Baby Boomers UPDATE: Incomplete homes, unfinished amenities, lost deposits.

Thursday, January 03, 2008. AZ: Pool builder: 'Kickbacks' cost homeowners millions Ostlund estimates that agreements between home builders and pool companies to act as "preferred pool builders" have cost 70,000 homeowners as much as $250 million in overpayments since 1997...."The pool company will kick back approximately 12 percent of the pool price to the home builder."

Thursday, January 03, 2008. World: U.S. subprime problems causing woes in Europe, too Because U.S. mortgages were packaged into securities and sold around the world, banks abroad have suffered losses when Americans found themselves unable to pay.

Wednesday, January 02, 2008. FL: Panitz Signature Homes files for Chapter 7 bankruptcy (Adding to the growing list of builders filing for bankruptcy.)

Wednesday, January 02, 2008. TN; US: Hard work, unlawful tactics help some Hispanic builders conquer industry Avoidance of paying taxes, workers comp insurance, benefits, and decent wages; undercutting competitors who do things legally.

Wednesday, January 02, 2008. NC: Rapp tries to round up support for slope development bill State representative pushing for safer construction on mountain slopes that are subject to landslides; powerful lobbying arms of builders and realtors oppose him.

Wednesday, January 02, 2008. OH; Nat'l interest: BBB list of complaint targets Home builders make top 10 list of complaints at BBB again.

Wednesday, January 02, 2008. US: How consumer-friendly are the presidential candidates? Sam Glover, a consumer-rights attorney in Minneapolis, did a little research into the 2007 records of the presidential candidates -- the current legislators anyway -- and concludes that "none of the candidates seem to care very much about consumer issues."

Wednesday, January 02, 2008. St. Louis Business Journal: BBB revokes Superior Exteriors membership Siding, windows, and doors company booted for failing to respond to customer complaints and failing to honor subsequent arbitrator decisions

Wednesday, January 02, 2008. US: UPDATE on actor Tom Hanks' construction defect arbitration and lawsuit (Keep in mind this is a pro-arbitration site so that will be the slant to their articles. Article has link to PDF of the lawsuit. --Ed.)

Wednesday, January 02, 2008. US: Brain-Dead Predictions about Housing Price drops, abandonment of McMansions and houses built in flood plains, and more.

Wednesday, January 02, 2008. US: The Cult of Plausible Deniability Consumers are sensationalized as villains by industry pundits and the media when, in reality, all mortgage fraud requires the orchestrated efforts and coaching of licensed real estate professionals.

Tuesday, January 01, 2008. TN: Builders fail tests, get licenses
More than 60 home contractors who have repeatedly failed licensing tests continue to pour foundations, install drywall and wire electrical systems in Tennessee homes thanks to passes granted by a state oversight board.

About a third of the test-flunkers who instead took job interview-like oral exams have histories that include complaints of poor workmanship, thousands of dollars in judgments against them or instances of working without a license, records show.

Tuesday, January 01, 2008. Wall Street Journal: Lender Lobbying Blitz Abetted Mortgage Mess During the housing boom, the subprime industry succeeded at more than just writing mortgages. It also shot down efforts by some states to curtail risky lending to borrowers with spotty credit.

Ameriquest Mortgage Co., until recently one of the nation's largest subprime lenders, was at the center of those battles. Working with a husband-and-wife team of Washington lobbyists, it handed out more than $20 million in political donations and played a big role in persuading legislators...

Tuesday, January 01, 2008. MA; Nat'l interest: Tough choices for unfinished developments Builder Ed Domings went to Europe leaving Blueberry Hill Estates unfinished; can happen with builders of all sizes. Bankruptcies can leave developments, roads, etc, unfinished, and towns and homeowners holding the bag.

Tuesday, January 01, 2008. IL: Builder faces lawsuit Lender suing Lennar: The lawsuit filed Nov. 30 seeks to have Creekside Crossing put into foreclosure and sold in order to generate funds to pay off the loans. According to the lawsuit, the loans are in default and were due on Nov. 15.

Tuesday, January 01, 2008. Charlotte Observer: Americans overinvest in look-at-me houses Selling ego, not shelter: Worse, government subsidizes these supersized homes. In 2008, the tax deduction for mortgage interest payments will cost the federal government $89 billion.

Tuesday, January 01, 2008. Kansas City Star: American dreams built on a shaky foundation of subprime loans By reporter Paul Wenske: Dana cited lax underwriting standards, borrowers who didn’t understand the terms of their loans, and regulators who weren’t paying enough attention.

Consumer advocates, however, said borrowers with little experience in home buying got caught up in a frenzy, fed mainly by nontraditional lending institutions and thinly regulated brokers who were more intent on making fat commissions than making quality loans. Big national banks also dove into the market with subprime subsidiaries.

“You had an army of salespeople who were hired to go door to door and sell these things very aggressively,” said Michael Duffy, the managing attorney of Legal Aid of Western Missouri, who noted that subprime loans are more complex than conventional loans, yet borrowers often received less loan-disclosure information.

Tuesday, January 01, 2008. MSN: The new ghost towns More people buying into new developments are being left high and dry when their builders file for bankruptcy. Here's how homeowners can protect themselves.

Tuesday, January 01, 2008. NY Times: Officials Falling Behind on Mortgage Fraud Cases Number of mortgage fraud cases has grown so fast that government agencies that investigate and prosecute them cannot keep up.

Tuesday, January 01, 2008. AZ: A.J. developer could duck ACC grilling Developer Jim Rhodes probably will not have to explain why he kept a crooked Nevada politician on his payroll for years as he finalizes his plans for a massive development on state land in Apache Junction. [Be sure to click on link to background to this ongoing story, "Read an earlier Tribune series on Jim Rhodes," by reporter Mark Flatten. --Ed.]

Tuesday, January 01, 2008. US: Biggest home-builder write-downs are yet to come Either home builders as a class are grossly undervalued, or their assets are worth much less than their financial statements say. Odds are it's the latter.

Tuesday, January 01, 2008. US: Lennar's Insolvency: Enron Redux? Author feels Lennar could be heading into bankruptcy.

Tuesday, January 01, 2008. FL; US: Don't Bet House on Rebound This Year The new year will be one in which we continue to do penance for the sin of housing overexuberance.

Tuesday, January 01, 2008. US: Crumbling foundations Housing slump could topple jobs, banks, economy: rapid rise in home prices led to increase in spending relative to incomes.

Tuesday, January 01, 2008. FL: M/I Homes pulls out of volatile West Palm Beach market The Columbus home builder said it has sold 500 lots in the West Palm Beach market, which it is leaving after 22 years. Many builders are attempting to sell lots to raise cash because of the slow market for new homes.