KB Home CEO receives $24.4 million in 2007 despite housing downturn
The chief executive of KB Home received compensation valued at $24.4 million in fiscal 2007, a year in which the homebuilder swung to a loss amid the subprime credit crisis and the downturn in the housing market. Mezger's compensation package included $1 million in salary and a $6 million bonus that Mezger received for strengthening the company's balance sheet, improving performance on a customer satisfaction survey, cutting costs and developing senior leadership in his first year as CEO...The Los Angeles-based company posted a loss of $929.4 million... Revenue dropped 32 percent. See related KB Home construction warranty issues

KB Home to quit building in some markets
Home builder KB Home said Friday that it would stop building in Chicago, the mid-Atlantic region and Albuquerque, N.M., after finishing houses under construction in those regions... KB Home had a loss of $929.4 million in fiscal 2007, compared with net income of $482.4 million a year earlier. See KB Home construction warranty issues

Texas case may mirror Orlando bombing range site at PinecastleThea King-Lewis found out that her dream home was built atop a former military bombing range after children and a dog dug up live ordnance in a yard down the street. The discovery touched off evacuations, a real-estate panic and plummeting home values. Teams of Army Corps of Engineers combed backyards with high-tech gadgets on the hunt for more bombs... their homes and a school were sitting on a powder keg. (Lewis) She also was among three women accused of planting an old piece of munitions on KB property, in the neighborhood where the Army Corps of Engineers found hundreds of similar objects. Those accusations were also later dropped. King-Lewis is bound by the terms of her settlement not to speak about specifics of her case. But her history there is well documented...And in a sworn affidavit, King-Lewis asserted that an attorney for KB Home offered to drop the lawsuits and buy back her property if King-Lewis were to lie about Janet Ahmad, the leader of the watchdog group HomeOwners for Better Building, which championed the cause of the Arlington homeowners..."It was an out-and-out bribery attempt and she wouldn't go for it," Ahmad said.  See related feature: KB Home Attempts to Bribe Homeowner Plus See Sworn Affidavit

Henry Cisneros on board of directors of Countrywide Financial
Cisneros' financial fortunes would soar, too. He was granted — and sold — more than $5 million in company stock as prices climbed from around $10 per share in 2001 to more than $40 per share in late 2006 and early 2007. Additionally, he earned a base salary of $70,000 per year and received $1,500 for each board meeting attended, $750 for each phone meeting and health insurance. Overall, Countrywide's directors were among the country's best compensated. Yet Countrywide's business began unraveling during the watch of Cisneros and his fellow directors. While the company's executives are considered primarily responsible, the case of Countrywide illustrates how quickly a director can find himself accused of having divided loyalties and poorly representing shareholders' interests.

Henry Cisneros on the hot seat
February 15, 2008 - Henry Cisneros and Countrywide Fincial - How much do you think Henry Cisneros is responsible for the plight of Countrywide Financial, its shareholders and its customers? Original Express News Article Link  * See Reader Comments

SAHA chief seeks to recoup some Mirasol costs
The San Antonio Housing Authority's new board chairman, appointed earlier this year by Mayor Phil Hardberger, said Tuesday he hopes to get back some of the agency's expenses for repairs at Mirasol Homes from the project's builder. Ramiro Cavazos said he met last week with local KB Home representatives, but indicated he expects to deal with officials from the national office in Los Angeles before an agreement is reached..."If I had to kind of say who's really at fault here, it's not the homeowners. They've been told they're not maintaining their HVAC systems, and things like that," he said. "I really think it was a design flaw in the windows and the buildings themselves, and then the HVAC systems built by KB Home and its contractors."  Related articles...HUD's Broken System

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

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.

KB Home Buys Back Bombing Range Home Despite Attempt to Bribe Owner 
Thea King-Lewis has maintained that KB Home in 2002 attempted to bribe her to give false statements to the Arlington Police Department and testimony against Janet Ahmad, President of HomeOwners for Better Building.  To this day she has refused. In March 2002 Thea King-Lewis refused on two occasions to sign false statements prepared by Victor Toledo, attorney and Vice President of Legal Affairs for KB Home in exchange for financial consideration.  Eventually, in December 2003 KB Home bought the Lewis home back however, the day before, she submitted the following Sworn Affidavit to the Tarrant County District Attorney regarding the attempts by KB Home's Victor Toledo to bribe her.  Read more: KB Attempts to Bribe Woman - Inman Report:  KB Community of Bomb & Attempt to Bribe  See Video: WFAA's Bryan Harris Investigates KB Home & Bombs

Down the Test Tubes
One hotspot, the closest one to the Boeing’s old Rocketdyne lab, had clocked in at 411 times “hotter” than normal for the area. “Are we to believe that Runkle Canyon’s soil, which is next to the site of this country’s worst nuclear meltdown, the Santa Susana Field Laboratory (SSFL), tests cleaner than the background readings of Sr-90 in the area?” ...KB Homes had hoped to build 461 residences in the 1,595-acre canyon, but those plans have been delayed since the summer of 2006 when Southwick and a cadre of residents who call themselves the “Radiation Rangers” (See: “Dirty Business,” Nov. 1, 2007) questioned the safety of the project. In May 2007, the Rangers had Runkle Canyon tested for heavy metals and found high levels of arsenic, nickel and vanadium which is documented in reports on their Website StopRunkledyne.com. Later city tests found even higher levels as well as barium, cadmium, chromium and lead.

Homeowners advocate found guilty
Janet Ahmad, founder of the advocacy group HomeOwners for Better Building, will have to pay a $4,000 fine and was given a year of probation for the misdemeanor. The case involved an Arlington neighborhood that was built on the site of a former World War II military practice bombing range. Residents previously had uncovered unexploded but harmless ordnance, and several residents sued the builder, KB Home, for not telling them about the range.  Although Ahmad was found guilty of possessing a hoax bomb, the jury found her not guilty of making a false 911 call to report that bomb to the police... Recently, Ahmad has been involved in efforts to organize residents of Mirasol Homes, where homeowners have complained to the San Antonio Housing Authority about shoddy construction and health concerns.  She said she believes the misdemeanor charges in Tarrant County were filed in retaliation for her advocacy efforts. "KB is not held accountable, and I'm disgraced on trumped-up charges," she said.  20/20 Report