CNBC REALTY CHECK: Builders Don't Get Bail Out, So They "Bail" On Congress
Today, the National Association of Home Builders' Political Action Committee, BUILD-PAC, and its 150-member Board of Trustees representing all 50 states, agreed to cease all approvals and disbursements of BUILD-PAC contributions to federal congressional candidates and their PACs until further notice.  Why? At first I thought, ok, they’re making a statement, but what lawmaker is really going to care? Until I called the Center for Responsive Politics and found that the NAHB was the 3rd most generous contributor to Congressional candidates in the last election cycle (the Realtors are #1, by the way). Builders gave about $3 million to candidates in 2006, 73 percent of it to Republicans. That ain’t chump change, so that's more than a statement. VOTE IN REALTY CHECK POLL  ## See CNBC Video Report

Poorly Built by Pulte Homes
Nearly two out of every three homeowners (66 percent) indicated that they have sought repairs under Pulte’s limited warranty. read the report.  Tracking Pulte- We will post the latest news as well as links to services across the country where unhappy homeowners can seek relief. Learn more about Pulte...

Beazer leaving area amid investigations
Beazer Homes USA, a home builder under federal investigation, said Friday it will stop building in the Charlotte market and close its national mortgage unit -- a business in which it says employees violated federal housing regulations. The Atlanta company gave no timetable for the withdrawal. Beazer's statement also said it will stop building in Columbia, in Lexington, Ky., and in Cincinnati, Dayton and Columbus, Ohio. The company said it will complete homes under construction and continue providing warranty services.

Developer to reshuffle board seats
Sun City Hilton Head's developer will soon re-gain a majority vote on the seven-member Community Association Board of Directors. Pulte Homes general manager Jon Cherry will announce at today's board of directors quarterly meeting that he will replace two resident board members with Pulte representatives, according to a letter he wrote and distributed to board members Tuesday. Cherry will be one of the new Pulte representatives, the letter said.

Project Lifeline provides 30 day breather for loan mods
Loan servicers and lenders who handle about nine out of 10 subprime loans have agreed to participate in an initiative to help delinquent borrowers by putting foreclosure proceedings on hold for up to 30 days to evaluate alternatives. The Project Lifeline initiative, targeted at borrowers who are 90 days or more behind on their payments, was announced by six major lenders on Feb. 12 (see Inman News story).

HOME BUILDER AND COUNTRYWIDE ACCUSED OF CONSPIRACY TO DEFRAUD CONSUMERS
KB Homes and Countrywide conspired to produce phony appraisals to sell homes at higher prices. Exaggerated (or fraudulent) home appraisals played a role in the housing price run up earlier this decade and contributed the collapse we are seeing now. The new class suit alleges that Los Angeles based home builder KB Homes and a unit of mortgage lender Countrywide Financial Corp. produced falsely pumped up appraisal reports so new homes could be sold at prices higher than the homes were truly worth.

HOME BUILDER AND COUNTRYWIDE ACCUSED OF CONSPIRACY TO DEFRAUD CONSUMERS
KB Homes and Countrywide conspired to produce phony appraisals to sell homes at higher prices. Exaggerated (or fraudulent) home appraisals played a role in the housing price run up earlier this decade and contributed the collapse we are seeing now. The new class suit alleges that Los Angeles based home builder KB Homes and a unit of mortgage lender Countrywide Financial Corp. produced falsely pumped up appraisal reports so new homes could be sold at prices higher than the homes were truly worth.

BusinessWeek: KB Home customers sue over pricing
Two California couples are suing KB Home and mortgage lender Countrywide Financial Corp., claiming the companies schemed with real estate appraisers to inflate prices paid for homes as the housing market began to tank. The complaint, filed Wednesday in Los Angeles Superior Court, also names as a defendants KB Home Mortgage Co., Countrywide Home Loans Inc., Countrywide KB Home Loans -- a joint venture of Countrywide and the builder -- and two real estate appraisers

Homeowners can sue builders over defects
Iowans who find defects in their homes can sue contractors for work-related damages years after the fact, even if they bought the house from previous owners, the Iowa Supreme Court ruled today. The court’s 6-0 decision reverses two lower-court rulings against a Clive couple, Mike and Bev Speight, who had tried to sue Walters Development Co. for water damage to their home. In 2005, the couple discovered that they could stick their fingers into the siding of their house, and found water spilling into their basement caused by faulty shingles and rain gutters. “We believe that Iowa law should follow the modern trend allowing a subsequent purchaser to recover against a builder for a breach of the implied warranty of workmanlike construction,” Justice Jerry Larson wrote in the 14-page ruling. Read Decision...

Beazer leaving area amid investigations
Beazer Homes USA, a home builder under federal investigation, said Friday it will stop building in the Charlotte market and close its national mortgage unit -- a business in which it says employees violated federal housing regulations.Beazer said it will pair with Countrywide Financial as a preferred mortgage lender.  Countrywide, the nation's largest mortgage lender, has become the poster child of the U.S. mortgage crisis prompted by lending to people with sketchy credit and enabling some to buy houses they couldn't afford. Charlotte's Bank of America is buying the troubled lender.

Court: Buyers of pre-owned homes can sue builders
The Iowa Supreme Court ruled Friday that homeowners who find work-related defects years after the fact can file claims against contractors, even if they are not the original buyers. The 6-0 decision reversed two lower-court rulings against the Speights, the third owners of the house in question, and overturned a similar case in Linn County. Brian Rickert, the attorney for the contractor, said the ruling could "flood the courts with lawsuits" from homeowners and dumps a significant burden on legitimate builders. He fears frivolous claims and costly court battles over damage that might have been caused by previous owners.

Credit forcing home builders into bankruptcy
Home builders in metro Atlanta are in trouble, not just because they're not selling enough houses, but because they are having a hard time getting credit from their banks. "We are seeing large numbers of builders that are not able to get extensions of credit to either keep building or hold their inventories," said James L. Paul, business litigation and Chapter 11 reorganization attorney with Chamberlain, Hrdlicka, White, Williams & Martin in Atlanta. "The banks are not able to give extensions to enable the builders to sell off their nventories." Prior real estate busts in Atlanta certainly involved overbuilding and credit restrictions, factors in today's downturn, he said. But the prior downturns with tightening credit really only affected unqualified borrowers. This time, it's different. Read more...

Fired VP files suit against lender
Countrywide KB Home Loans, a joint venture between Countrywide Financial Corp. and KB Home, approved loans for unqualified borrowers just so KB could continue to build homes, Mark Zachary, who worked for the company between August 2006 and mid-2007, claims in his lawsuit filed in a Houston federal district court. The U.S. Department of Labor is also investigating a complaint filed by Zachary, the lawsuit claims. The Labor Department would not confirm or deny an investigation... Zachary attorney Philip Hilder declined to comment on the specifics of the lawsuit. But he did say it was filed to put Bank of America, which is acquiring Countrywide, on notice of a potential liability. The lawsuit also claims that Countrywide KB Home Loans converted loan applications that required full documentation to those that didn't require much. Some loan officers also coached applicants on the income they would need to state in order to qualify for a loan when it was sent to the company's subprime operations center in Plano, the lawsuit alleges.

Countrywide, KB Home Venture Sued by Fired VP
According to a complaint filed this month in U.S. district court in Houston, the former executive Mark Zachary alleged that Countrywide KB Home Loans approved unqualified borrowers for loans so that KB Home could build more homes.  According to the complaint, Zachary questioned Countrywide's practice of using for KB Home just one appraiser whom was "strongly encouraged" to inflate appraised values by up to 6 percent because "that was the way KB Home wanted it." He also questioned what he called Countrywide's practice of converting loan applications that required full documentation into "stated income" or "no income, no assets" applications, saying loan officers would sometimes help borrowers submit applications with false income amounts, the complaint said.

Crime Increase In Gated Community Prompts Residents To Leave
Many residents living in a gated community in Osceola County have gotten so frustrated with the lack of security, that they are leaving. Members of the gated Amber Point community said their neighborhood was not really gated at all. They said the entrances have been left open around the clock, and crime has coming into their neighborhood.