Drum Major Institute for Public Policy has been doing some outstand work on the inequities of Binding Mandatory Arbitration (BMA) clauses in builder and other consumer contracts. Senior Fellow in Civil Justice Cyrus Dugger has developed the TortDeform – The Civil Justice Defense Blog.  Please send Your Arbitration Experience and comments about BMA to Cyrus Dugger - This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
Please cc your correspondence to me as well.

Please take a few minutes and post your comments on the H O B B   F o r u m

Janet Ahmad, President
HomeOwners for Better Building
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HOBB News Update
Again, Limiting Risks of Homebuilding Business
Building Is Risky Business
Create job documentation that is so tight, it could scare off a hungry attorney at the onset...Review trade contractor's insurance and written agreements...Time to tune up these items. Study your trade contractor's liability policy to make sure the dollar limits are high enough for your jobs, and check for their exclusions in coverage. For example, if your policy excludes soil movement, then be sure your subcontractor has this particular coverage... All jobs should have a written and signed trade-contractor agreement, preferably one which includes "hold harmless" indemnity clauses, waiver of subrogation, warranty provisions, insurance requirements (that you request), and a provision for binding arbitration for dispute resolution. In simple terms, you want to transfer the risk to your subs, making them the primary insured. This agreement establishes which policyholder's insurance will pay first and who is responsible in a claim... Consult a construction-contract lawyer for review of all your sales contracts. Make sure they, too, contain binding arbitration provisions in the event of a dispute. Read more...

Tough Times for KB Home
KB Home opts out of L.A. Live
Citing the ongoing housing slowdown, KB Home has withdrawn from a joint venture to build a 54-story hotel and condominium tower that is a central component of the L.A. Live project in downtown Los Angeles adjoining Staples Center... KB Home also is tackling a stock option scandal that prompted longtime Chief Executive Bruce Karatz to resign last month and delayed the filing of financial reports, which triggered notices of default on some of its corporate debt. The company also said it would have to restate more than two years' worth of results. Citing potential liquidity concerns, Moody's Investors Service on Friday said it would reassess KB Home's ratings for possible downgrade. The review affects about $2.4 billion of debt. Read more...

Builder responds to critics of defective homes
World Homes says only small number of houses defective -working to repair problems
World Homes Guyana Inc says that of the 600 houses it has built so far only a small number has defects because of shoddy work by contractors, something which is beyond its control... Concerns have been raised in several quarters surrounding the quality of work executed by contractors in various locations on low cost housing. Members of the Guyana Association of Professional En-gineers (GAPE) have linked this to the fact that there is no registration system for local engineers hence anyone can carry out construction work without facing the responsibility for work of a poor quality. Read more...

Blaming the Inspector
Who's to blame?
They are among three township homeowners who have been vocal at recent board meetings, putting the blame for their woes on Almont's inspection process and the man who, until recently, was responsible for inspecting the work done by builders... Patrick Smylie says he and his wife have experienced nothing but issues ranging from poor grade and water retention to improper sealing and brick work at their home. They suspect it was built on a spring vein and point to their sump pump, which puts out over 5,000 gallons of water during the wettest months of the year, requiring his constant attention. Read more...

Organization to target Pulte Homes
Consumer Organization Will Announce Online Database Complaint File Concerning Pulte Homes, DiVosta Homes, Del Webb Homes, Says Executive Director Andy Martin
 CHICAGO, Dec. 8 /PRNewswire/ -- FightPulte.com, FightDiVosta.com and FightDelWebb.com will hold a Chicago news conference Monday, December 11th to announce a new online database complaint file directed at one of the nation's largest home building firms, Pulte Homes, DiVosta Homes and Del Webb. The news conference will also brand the "Pulte Homes Family" as America's "#1 violator of federal and state housing laws," says Executive Director Andy Martin. Read more...

Mortgage Fraud Convictions
Jury Convicts Woman of Mortgage Fraud, Two Others Plead Guilty

Mortgage-loan fraud convictions have been obtained against three women who operated manufactured-home sales companies in northern Arkansas. Read more...

Homebuilder Assoc. Lobbyist New State Rep. Arraigned on bribery, extortion and money laundering
Former opponent discusses Anderson arraignment
Alaskans are still reeling after the news of state Rep. Tom Anderson's arrest and new details that continue to emerge...Anderson was arraigned on seven federal charges yesterday, including bribery, extortion and money laundering...he introduced himself, though, as a lobbyist for the Homebuilders Association. Read more...

Missouri Man pushes for building codes
Ernest O'Gaffney wants an initiative on Christian County ballot in 2007
Ernest O'Gaffney, who says last year he unknowingly purchased a home that sits above a sinkhole, will gather signatures for a building-code initiative to be put on the county's ballot in 2007.The lack of building codes perpetuates "a situation where anyone with a pickup truck and a hammer can build a home without any inspection whatsoever, except for the septic tank, thus stripping the public in the unincorporated areas of the county of any protection as to health and safety whatsoever," O'Gaffney wrote in a letter to the county Board of Commissioners. Read more...

Pennsylvania Inspection Officials Step Down
Under-fire codes inspector warns many home exams will have to be postponed
Residents of Overpond Court have been complaining to the supervisors for 15 months that Lee ignored construction defects in their new homes. Their complaints led Labor and Industry to investigate, and the result is a letter to Lee dated Nov. 22 in which he is ordered to show cause to maintain his license...Builder Craig Lowe of Red Lion asked the board how it can ask Lee to step down after he has worked for the township and other local municipalities for more than 20 years. Read more...

Inadequate inspections a growing problem
Mississippi - Three On Your Side Investigates: Building According to Plans or Not?
The City of Madison is dealing with mortgage fraud, foreclosures, and homes abandoned by builders in upscale neighborhoods. Now code inspectors are scrutinizing details on new home construction. One city inspector preferred not to go on camera.  He pointed out inconsistencies on the approved blueprints from the current stage of construction on one Woods Crossing home. He said, "It has a dormer over the garage, the plans don't have that." Details specified on plans, but in non-compliance when built. Mayor Mary Hawkins-Butler said the plans submitted are not what's on the ground." Read more...

NY State finds inspector incompetent and negligent
State says Stewartstown code inspector certified unsafe homes
A Stewartstown building code inspector allowed people to move into a home that lacked safe drinking water, had leaky windows and doors and was built with lumber that wasn't properly identified, the state alleges. The home is one of four in York County that E. Michael Lee certified were safe for occupation but weren't, according to the state Department of Labor and Industry. Lee's certification to conduct building code inspections is in jeopardy. After investigations into his work, the state Department of Labor and Industry says he is incompetent, neglected his professional responsibilities and risked public health and safety. Read more...

Masked mortgages - Mayor dupes banks and consumers in scam 
With the housing boom over, its dark side is coming to light, including fraud. Government data show more criminals – and more consumers – lied to sell or buy expensive homes.
Pam Houchen, the former mayor of Huntington Beach who helped dupe lenders and borrowers in a real estate scam, is a good example of a national phenomenon. The local scheme contained an element common to other cases nationwide: people tricking banks and consumers out of their money. Such shenanigans, which fall under the umbrella of mortgage fraud, ballooned as the housing market heated up, according to government data and industry experts. Read more...

Mortgage Fraud and Evictions 
Wrongful evictions can turn homeowners into victims
Because mortgage fraud is such a widespread problem in poor communities, it's likely that a lot more people will wind up in Hughes' position. At least anecdotally, this fraud disproportionately affects African Americans and Hispanics, said Cara Smith, a spokeswoman for the Illinois attorney general's office. Among other things, the Mortgage Rescue Fraud Act, which takes effect Jan. 1, requires that the "rescuers" provide a written contract that shows the home is being sold. Rescuers must also make a determination that the homeowner has the reasonable ability to make rental payments and buy the home back. Read more...