D.R. Horton Sued for Lending Practices
D.R. Horton Inc., one of the nation's largest homebuilders, is being sued by a one-time customer who says he was forced to use the company's affiliated mortgage service to buy his home, according to a regulatory filing. The lawsuit charges the homebuilder with violating the Real Estate Settlement Procedures Act, according to a filing with the Securities and Exchange Commission...Horton's revenue from homebuilding fell to $2.55 billion from $3.59 billion, and the number of closings on homes plunged 28 percent. The company's cancellation rate for homes reached 38 percent, twice the norm.

Associated Press
D.R. Horton Sued for Lending Practices
By MATT SLAGLE
08.09.07

Dallas - D.R. Horton Inc., one of the nation's largest homebuilders, is being sued by a one-time customer who says he was forced to use the company's affiliated mortgage service to buy his home, according to a regulatory filing.

The lawsuit charges the homebuilder with violating the Real Estate Settlement Procedures Act, according to a filing with the Securities and Exchange Commission.

The complaint, filed in U.S. District Court, Southern District of Georgia, says the homebuilder required that home buyers use Horton's affiliated mortgage company in order to get discounts and incentives.

Fort Worth-based D.R. Horton  (nyse: DHI - news - people ) said the suit was baseless. The 32-page lawsuit was filed in June by John R. Yeatman against D.R. Horton and its mortgage company, DHI Mortgage Co. Yeatman is seeking class-action status.

"We believe the claims alleged in this action are without merit and will defend them vigorously," the company wrote in the filing. However, the company also said that "due to the early stages of this matter, we are unable to express an opinion as to the likelihood of an unfavorable outcome or the amount of damages, if any."

The company said it did not believe the case would have any impact on its finances.

In the most recent quarter between April and June, D.R. Horton took nearly $1.3 billion in charges, in part to write down the value of unsold homes and deposits on land, pushing the company to a loss of $823.8 million, or $2.62 per share. A year ago, the company earned $292.8 million, or 93 cents per share.

Horton's revenue from homebuilding fell to $2.55 billion from $3.59 billion, and the number of closings on homes plunged 28 percent. The company's cancellation rate for homes reached 38 percent, twice the norm.

D.R. Horton shares rose 22 cents to $18.81 in trading Thursday.

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