Did 1/3 of KB Home Board of Directors Quit or Have Been Secretly FIRED?
This is the third and fourth “Board-Level” resignation at KB Home in the last few weeks? Were they fired or are they just quitters? Can’t do the job, or did the job suck so bad? It’s hard to keep a straight face when your company has a policy of lies and to never do the right thing.

Home Owners for Better Building Editorial:
Please, No More Corporate Welfare Needed
...while CEO's from Wall Street and Banks were in the hot seat in front of Congress homebuilders were noticeably out of the limelight of public blame.  To help themselves builder’s lobbyist negotiated federal funds to help to stimulate the nation’s homebuilding business. Their “Market Crash Cure” super plan was to first convince Congress that the federal government needed to fund new home loans .  Industry paid lobbyist negotiated Corporate Welfare which allows builders huge tax refunds that are collectively worth about $33 billion. According to the experts," KB Home, government stimulus has not helped the industry, nor will it anytime soon.

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Home Owners for Better Building Editorial:
No More Corporate Welfare Needed
KB Home exec Jeffrey Mezger admits big homebuilder government stimulus has not helped the industry. To help themselves builder’s lobbyist negotiated federal help to stimulate the nation’s homebuilding business. The “Market Crash Cure” was to convince Congress that what was needed to cure the building industry woes was more of the same.  Industry paid lobbyist negotiated some Corporate Welfare which allows builders huge tax refunds that are collectively worth about $33 billion. 

Cisneros: Profiteers, Not Government, To Blame for Housing Crisis
Former HUD Secretary Henry Cisneros placed the blame for the recent housing crisis on “unscrupulous interests” that fueled reckless lending and weak regulation rather than housing policies of the past two decades. Mr. Cisneros, now a 62-year-old developer based in San Antonio, served as secretary of the Department of Housing and Urban Development from 1993 to 1997...  During his term, HUD loosened some lending requirements for lenders providing HUD-backed loans. Still, in a speech to the National Association of Real Estate Editors in Austin on Thursday, Mr. Cisneros blamed the housing crisis on a mix of interests looking to profit from the housing boom of last decade. Among them: Wall Street firms that created exotic instruments like collateralized debt obligations that eventually failed, rating agencies that graded those instruments too leniently and overzealous mortgage lenders such as Ameriquest Mortgage Co.

Planning commission rejects 73-unit housing development
A proposal by KB Homes, to build 73 homes on empty lots in the Paradiso community that were not developed by Lennar Homes in north Indio, was denied Wednesday by the Indio Planning Commission.The standing room-only audience of about 100 citizens erupted in applause and cheers after the decision was announced...KB Homes has had at least four meetings with residents over the past several months to discuss the project and issues. More than 80 residents, members of the Homeowners of Paradiso Community Association signed a petition in protest of KB homes' project stating the need to “protect our property values and community living standards.”

UPDATE 3-KB Home ex-CEO found guilty of mail fraud, lying
The flashy CEO was the most high profile executive to be accused of illegal backdating as efforts to crack down on the practice in the post-Enron era resulted in a spate of investigations and internal audits. Illegal backdating allows employees to make a greater profit on stock options, as a retroactively chosen grant date, when the share price was lower, ensures greater profit after the stock rises and grants are exercised.Karatz showed no emotion as the verdict was read and did not comment leaving the courthouse. Prosectors also declined to comment. According to the Department of Justice, the maximum penalty could be 80 years. Sentencing was set for Sept 8.

Dealings raise new suspicion of developer
The Texas developer who is supplying the capital funds for the Community Maritime Park development team is battling a $100 million civil suit over a public-housing project in his home town in Texas.In Texas, the San Antonio Housing Authority and a group of individual homeowners have filed a suit seeking damages from Rodriguez, his MAGI Real Estate Services and general contractor KB Homes for allegedly shoddy work and unsubstantiated expenditures on the Mirasol Homes project. In 2004, U.S. Rep. Charlie Gonzalez, D-San Antonio, called for a federal audit of the project after numerous claims that the project's 247 units were poorly built and failed to meet various building codes.  

Contrasting portraits of former KB Home chief as trial opens
A federal prosecutor told jurors in his opening statement that Karatz was a greedy man who made more than $6 million in "secret pay" by manipulating stock option grant dates and then lying about it in regulatory filings and in interviews with lawyers and accountants. "He stole without shareholders' knowing about it and he used stock options to do it," Assistant U.S. Atty. Alexander A. Bustamante said."When he was asked about it, he lied. . . . He lied within the company. He lied outside the company."

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.