Pending Home Sales Unveil Troubling Truth
KB Home (NYSE:KBH), D.R. Horton, Inc. (NYSE:DHI), Pulte Homes, Inc. (NYSE:PHM) and other homebuilders could see trouble down the road after a thought-to-be-expiring housing tax credit led to a sharp drop in pending home sales for the month of November.The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell a higher-than-expected 16% to 96 from an upwardly revised 114.3 in October, according to the National Association of Realtors... For now, the housing tax credit that caused the drop has been reinstated, meaning that the homebuilder sector should expect better numbers in future quarters. But some investors are beginning to wonder if the government has created a whole new house of cards…  Related Market Watch Builder Incentive Article: Oct. 2006, Home builders up ante to lure buyers

Suits grow against KB Home
At a time when KB Home is again breaking ground in Creekside, a lawsuit against the builder continues to gain ground. The Seattle-based law firm of Hagens Berman Sobol Shapiro LLP filed a lawsuit against KB Home, Countrywide Financial and LandSafe Appraisal Services on Oct. 30 in U.S. District Court in Orlando. The class-action suit represents Florida, North Carolina and South Carolina homeowners. The suit is the latest development in an ongoing investigation into KB Home practices.

Florida class-action suit accuses KB Home of inflating prices
A Florida class-action lawsuit filed Friday accuses KB Home, among the bestselling builders in the Tampa Bay area, of inflating home prices by hundreds of millions of dollars.  Also named as defendants in U.S. District Court in Orlando were Countrywide Financial and LandSafe Appraisal Services.  Florida home buyer Stephanie Sullivan claims the three companies employed a "well-planned scheme" to manipulate home appraisals to justify higher prices during the housing boom. Sullivan paid $426,000 for her Orlando home in 2006 and subsequently lost it to foreclosure.  The law firm representing Sullivan, Hagens Berman Sobol Shapiro, has filed several lawsuits against builders with the backing of the labor unions trying to organize KB's workforce. In those previous lawsuits, builders have denied wrong doing.

The home builder disclosed that the probe is focused on 'possible accounting and disclosure issues.'
KB Home's filing also noted the ongoing struggles of the national housing market. "A general oversupply of new and resale homes, exacerbated by rising mortgage delinquencies and foreclosures, continued to depress prices and intensify competition, while poor job market conditions, tight mortgage lending standards and weak consumer confidence restrained demand," it said.

Mystery Over Accounting Probe May Spook KB Home Investors
Does an accounting probe by the Securities and Exchange Commission mean another regulatory black eye for KB Home?  In a disclosure buried deeply in a quarterly filing, the Los Angeles-based home builder said Friday that the SEC staff has issued a “formal order of investigation … regarding possible accounting and disclosure issues. “It’s tough to really know” whether the investigation will lead to serious problems for KB, said Ivy Zelman, chief executive of Zelman & Associates, a housing research firm. But, she said, investors may want to stay away from KB stock until the matter is clarified...KB has had more than its share of regulatory woes in recent years.

UPDATE: SEC Investigating Builder KB Home
NEW YORK (Dow Jones)--Builder KB Home (KBH) disclosed Friday that the U.S. Securities and Exchange Commission issued a formal order of investigation regarding "possible accounting and disclosure issues." In the company's latest quarterly filing, which covers its third quarter, the Los Angeles-based builder said it is cooperating with the investigation. KB Home was notified Oct. 2. "The staff has stated that its investigation should not be construed as an indication by the SEC that there has been any violation of the federal securities laws," the builder said. No further details were available. KB Home, the nation's fifth-largest builder by 2008 closings, declined to comment beyond the filing.

Homebuilder KB Home loses $66M in fiscal 3rd-qtr
KB Home set out to compete with foreclosures last year by building smaller, more affordable homes, and the homebuilder’s decision is paying off. The company said Friday it cut its third-quarter loss as new home orders surged 62 percent from a year earlier and its cheaper-to-build Open Series homes helped bring down costs...the average selling price of its homes fell 15 percent.

DOW JONES NEWSWIRES: Builder KB Home: About 140 Homes Affected By Chinese Drywall
NEW YORK -(Dow Jones)- Builder KB Home (KBH) has identified about 140 homes, primarily in Florida, affected by Chinese drywall, executives said in an earnings conference call Friday. The Los Angeles-based builder estimates a repair cost of about $10 million, and it took a $6 million charge in the third quarter to increase its warranty liability. Builders have been disclosing their exposure to allegedly defective drywall - also known as wallboard - imported from China during the housing boom. A growing number of homeowners complain that it generates sulfurous odors and corrosion. The complaints have led to continuing investigations by several government agencies. Earlier Friday, KB Home said that, for the quarter ended Aug. 31, it lost $66 million, or 87 cents a share, compared with a prior-year loss of $144.7 million, or $1.87 a share. Shares of KB Home recently were down 7.44% at $17.16 in a broad market downturn.  

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The Magic Mortgage Kingdom of KB Home - KB Home Offers a Magical Gift for Homebuyers
Like Disney magic KB Home defies its many critics with more of its same old lending gimmicks that left families with toxic mortgages and homeless.  Not too long ago HUD recommended shutting down builders subsidiary lending institutions like KB Mortgage; in fact HUD imposed negligible fines for massive loan irregularities.  Confident builders responded by filing a lawsuit against HUD.  Today HUD has backed off and KB Home boldly, if not playfully leads the pack amongst homebuilders and freely continues the same practices that contributed to the nation’s worst financial meltdown in history.  Together with the National Association of Home Building (NAHB) KB helped cleverly craft an $11 million Federal Taxpayer Stimulus through USDA a no-money-down, no PMI, contingent upon using builders’ affiliates like the death-defying KB Mortgage.  Related articles: Stimulus Tax Dollars At Work for KB Home

Adolfo Pesquera - Countrywide's toxic asset: House destroyed in 2006 fire still valued at $106,890
More than three years after a two-story house with a brick facade was destroyed by fire, it remains on the county tax appraisal rolls with a value of $106,890, and the walls have yet to be demolished even though the ruin is a clear safety hazard to neighborhood children. The house was built in 2000 and is surrounded by homes in the Sunset subdivision - a west Bexar County-based KB Home development, - that are all less than 10 years old...There is no roof. The interior was completely gutted. Portions of the back and side walls have caved in. And the two-story high front brick facade is just waiting for a good strong wind to knock it over.

Business Week: Homebuilders Think Small
The median home size has risen steadily for decades, from about 1,500 square feet in 1970 to about 2,302 sq. ft. in the first quarter of 2007, when the trend began to reverse as the housing downturn worsened, according to the National Association of Home Builders. By the first quarter of 2009, the median home size had dropped to 2,239 sq. ft...Los Angeles-based KB Home, which has been most aggressive about this strategy,...Fort Worth's DR Horton has a number of models... ranging from 900 sq. ft. to 1,500 sq. ft.

KB Home - Financial and Strategic Analysis Review - new market report just published
Despite $3.2 M HUD fine KB Home Mortgage and Countrywide relationship continues
It targeted customer group includes first-time, first move-up, and adult buyers. The company, through joint venture agreement with Countrywide Financial, operates Countrywide KB Home Loans, which is engaged in offering mortgage services. Additionally, KB Home through its operating subsidiary, KB Home Mortgage Company, is engaged in offering title and insurance services to its homebuyers

KB Homes gets sued over appraisal values
KB Homes is the target of lawsuits in Arizona and California claiming the builder, Countrywide Financial and LandSafe Appraisal Services conspired to rig appraisals toward higher sale prices in KB developments. Similar claims are being investigated in Florida, according to the Seattle-based law firm Hagens Berman, which filed the lawsuits. In two developments identified in the suit, typical appraisals were inflated an average of more than $82,000 per property, according to the release.KB Homes is building houses in nine Jacksonville metropolitan-area subdivisions, according to its Web site. The company did not respond to a request for comment.

Wading into a neighborhood dispute
Rep. David Leibowitz, D-San Antonio, has stepped into the latest round in the fight between some homeowners in three KB Home neighborhoods and their builder-controlled homeowners associations.  Leibowitz held a meeting last week with homeowners, has attended a recent homeowners association hearing with a resident and is gathering documents and complaints. “They're playing the odds,” Leibowitz told the homeowners Thursday night. “They're assuming you won't fight back. We're going to fight back.”

KB Home Target of Investigation in Florida, Hagens Berman Announces
The law firm representing homeowners in class-action lawsuits in Arizona and California against KB Home (NYSE: KBH), Countrywide Financial and LandSafe Appraisal Services, is claiming the three conspired to illegally rig home appraisals in KB developments and has begun investigating similar claims in Florida. The filed lawsuits contend KB Home conspired with Countrywide and LandSafe to rig the appraisal process in order to drive development prices upward and increase KB Home profits, often using inflated comparisons to justify the high sales prices.