FREDDIE MAC PROMOTES CONSUMER CHOICE WITH NEW SUBPRIME MORTGAGE ARBITRATION POLICY
Freddie Mac announced today that effective August 1, 2004, it would no longer invest in subprime mortgages originated on or after that date that contain mandatory arbitration clauses. Freddie Mac is the first among secondary mortgage investors to adopt such a stance on subprime mortgages with mandatory arbitration clauses. This policy is aligned with the corporation’s existing prohibition on the use of mandatory arbitration for prime market mortgage investments.

Lawyer Says KB Contracts "Illegal"
The Donahues sued KB. But before they ever got their day in court, they learned that when they bought the house, they had signed away their right to sue the company. In fact, you may not realize it, but if you've recently bought a home from KB, you've also agreed never to take the company to court. Instead, you've agreed to resolve all warranty disputes through binding arbitration. That's where a third-party hears both sides, then makes a decision that is binding on both parties. "For consumers, it's not such a good idea," St. Mary's Law Professor L. Wayne Scott tells the Trouble Shooters, "because it tends to be controlled by the industry that writes the contract."

Homeowners Say Problems Not Disclosed
KB Home, the largest homebuilder in San Antonio, has been the target of protests from angry homeowners.  Now, the company is the subject of a News 4 WOAI TroubleShooters investigation..."If I'd have known it was a buy-back, there's no way we would've purchased the house," Diehl told the TroubleShooters."Nobody's going to buy my house for what I paid for it," Jesse Font told us. Font claims all of the windows in his home leak. Diehl showed us a crack that runs from his garage, through his house, to the back of his kitchen.  He was aware of the crack when he bought the house but says it's gotten worse.

Attorney knocks KB Home's suit
Arguing before the Third Court of Appeals on Wednesday, a former state chief justice challenged KB Home's attempt to restrain a Kyle couple from publicly protesting about their dissatisfaction with their home. Alice Oliver-Parrott, former chief justice of the First Court of Appeals, criticized a state district judge for granting what she called an overreaching, vague and unenforceable temporary restraining order.

Some complain new homeowner-rights bill not enough
News 8 has reported numerous stories of homeowners complaining of shoddy construction, and being left with expensive repairs. Lawmakers promised to find a way to hold homebuilders accountable, but some wonder if a bill passed Monday really does that...Unsafe and leaky construction has forced Dawn Richardson to move out of the new home she's still paying for. Richardson said the problem was mold, and the lack of a statewide code that would require homebuilders to meet specific standards. "The builders know they can't be held accountable, so I don't think that they are working to resolve issues," Richardson said.

Shoddy Building in the Housing Boom?
Annette Perry was giving her daughter Susan a bath when she heard what sounded like "a truck" slamming into the second story of her new $133,000 home in suburban Phoenix. She ran outside with her towel-clad two-year-old to inspect the roof. Nothing was visibly wrong. It wasn't until she was back inside that she noticed her dining-room ceiling was newly cracked from front to back. She says the builder, KB Home (KBH ), had installed the wrong type of supports for the roof in one spot and failed to align them in another area, causing her walls to bow.

Contractor watchdog faulted
The state agency charged with watching over construction in Arizona isn't doing enough to protect consumers, according to a report from the Auditor General's Office.The audit said the agency needs to fix a $5.5 million deficit in the recovery fund, which helps people who lose money to licensed contractors. A residential builder pays $300 initially to the fund and then $150 annually.

Attention Taxpayers!  New Public Housing built by KB
For those of you who are keeping up with your tax dollars at work. "San Antonio Housing Authority commissioners narrowed the scope of their investigation into problems at Mirasol Homes to  three questions and told their attorney to hire experts to get answers as soon as possible. Are the homes structurally sound? Did SAHA get what was specified and paid for? Did SAHA administrators perform reasonable and acceptable oversight?"

Homeowners may get relief from KB Home 
A bitter battle over the quality of some new homes on the far West Side may be resolved by an offer from the builder, KB Home, to purchase the houses back from their current owners. KB officials released a letter from the firm's in-house counsel Tuesday that advises an attorney retained by three homeowners in the Tara West Subdivision of the repurchase option... Council members Enrique Barrera, Enrique "Kike" Martin and Nora Herrera looked at problems in the homes Tuesday and came away convinced the deficiencies were severe. Mayor Ed Garza said he, too, examined the homeowners' claims last weekend and became convinced a buyback by KB Home was the only appropriate response.   

Prospective Homebuyers, Protesters Mix At Grand Opening
The Lago Vista subdivision is the first in a series of subdivisions targeting low-income homebuyers in the inner cities. The houses are being built in a joint venture with American CityVista, a company that is headed by former San Antonio Mayor Henry Cisneros. "Maybe it's the soil," Wiese said. "Maybe they shouldn't have built my house there. I need answers and I need something done. My house continues to crack." Janet Ahmad, a member of an organization called Homeowners For Better Builders, also was there to protest. "The builders cannot be held accountable," she said. "That's why people can only resort to this type of thing."