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HOBB Update Message
Monday, 19 November 2007

HOBB testimony House Subcommittee on Affordable Housing

A message from Janet Ahmad
HOBB testimony House Subcommittee on Affordable Housing

Houston’s U.S Representatives Al Green and Sheila Jackson Lee hosted a congressional subcommittee hearing on Affordable Housing chaired by Maxine Waters. HOBB submitted testimony requesting that before launching anymore affordable housing programs, members of this subcommittee should consider the unprecedented failed federally funded public housing programs, failures to build homes that will last, and the abuses of sub-prime, zero-down payment assistance scams...The economy that thrived through frequent greed of selling affordable houses, no matter the price, now threatens our entire economy.

In other news:
Washington: The Mortgage Reform and Anti-Predatory Lending Act of 2007 passed the House.

In Dallas builder Mike Kelly laughs at homeowners stuck with empty promises, while once again a state agency gives failing grades to the useless builders’ Texas Residential Construction Commission.

Houston’s Local 2 Investigates team found criminals servicing Heating and AC System.

In Chicago ABC’s I-Team and the Daily Herald investigates inadequate inspections.

Lennar dominates the news for its shoddy building as a North Carolina Developer defies Wetland laws and elected official lend a hand.

On Wall Street Ryland is facing ‘Junk’ Ratings as six builders commit big crimes, make giant profits, and pay small penalties for their predatory business crimes.  See these and much more new below…

Your participation is vital. Together we have and will continue to make a difference!  Help us to help you by keeping in touch. .
See the latest media coverage of the building industry exposed and related issues below!

Please take a few minutes to post your comments on the HOBB Forum   and have a wonderful holiday season!

 Thank you,
Janet Ahmad, President
HomeOwners for Better Building


HOBB: Subcommittee Testimony on Affordable Housing
Janet Ahmad, HOBB President Testimony on Affordable Housing
Affordable Housing promotions promised hope and opportunity for the American Dream to families for a brighter future.  Unfortunately, the ever-opportunistic building industry saw it as a promise for mega profits that has left a landscape of decline in home quality and values throughout new communities due to shoddy construction and widespread mortgage schemes that ensnared naive buyers... Before launching anymore affordable housing programs, members of this subcommittee should consider the unprecedented failed federally funded public housing programs, failures to build homes that will last, and the abuses of sub-prime, zero-down payment assistance scams...The economy that thrived through frequent greed of selling affordable houses, no matter the price, now threatens our entire economy.

Mortgage Reform and Anti-Predatory Lending Act of 2007 passed by House
House passes controversial anti-predatory-lending bill
The House of Representatives Thursday approved controversial legislation intended to combat predatory lending, amending some provisions to address criticism that the bill could worsen the credit crunch, but strengthening others. HR 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, would create a national licensing system for mortgage loan originators and require lenders to determine that borrowers have a reasonable ability to repay a loan. The bill would also create limited liability for companies that bundle mortgages for sale to Wall Street investors. Read more...

Builder Mike Kelly Laughs at Homeowners Problems
KVUE Part II Defenders Report: Homeowners face Mike Kelly
KVUE is there while homeowners ask home builder Mike Kelly tough questions, while he is under oath.  Mike Kelly is facing a state investigation and a District Attorney could bring criminal charges against him. KVUE:View Investigative Video Report...

Builder Laughs - TRCC Slow to Act
Homebuilder investigated for questionable business practices
In February, we first told you about an Austin home builder who was under state investigation for questionable business practices. Since then, the builder has sold all 3 of his austin subdivisions, Maravilla, Maravilla Hills, and La Ventana in Marble Falls. But, as you're about to see, Mike Kelly's history continues to follow him and it's caught the attention of authorities...In February we tracked down Mike Kelly, Maravilla’s developer. When we first approached him, he just laughed. Read more...

Lennar Hutto Parke Community Voice their Opinions, Loud and Clear
The Hutto News - OPINIONS
Lennar lied to homeowners - Hutto Parke residents deceived by developer -Residents want to forget building horror - Expansive soil was not fully disclosed.  Let's be realistic. When given a choice, people would not choose to build on expansive soil if they know that it will be a constant maintenance problem in the future. People don't intentionally buy new houses or new cars knowing that they will have to deal with high maintenance. We bought new homes not fixer-uppers. Read more...

Developer used massive advertising and deceptive sales practices to target Spanish-speaking buyers
Housing fraud alleged
...the developers and 10 other businesses used predatory lending, fraud and unfair business practices against Spanish-speaking homebuyers over the past two years...mortgage broker firms Universal Mortgage, IRA Mortgage and Creative Mortgage placed the plaintiffs in subprime loans instead of placing them in the best loans possible, then took undisclosed and excessive commissions from them...the plaintiffs are suing Countrywide Financial, New Century, Cameron Financial Group and Wells Fargo banks, saying they approved illegal and unfair business practices committed against the plaintiffs. Read more...

Lennar Homebuilding Texas Style and Non-disclosures
Interviews with Hutto Texas Lennar Homeowners
Sylvia Jacobson tells how Lennar deceived her - Linda and Ronald Shaw's struggle with their new Lennar home in Hutto Parke & not so impressive Lennar Home construction in Texas.
View videos...

Municipal Budgets Must Provide Inspectors for Adequate Inspections
ABC I-Team & The Daily Herald Join Forces: Rush to Inspect
ABC7's I-Team joined forces with "The Daily Herald" to investigate the national problem- and local dilemma. The findings- cities and suburbs do not have enough inspectors to keep up with the construction projects, resulting in "  Rush to Inspect" newly built homes and condos by time-challenged, short-staffed city agencies. After the I-Team began asking questions, the Chicago Building Department sent an inspection team to take another look. They noted two electrical violations, a suspicious leak in the gas and electric utility room, and low water pressure in some units. Read more...

JD Powers Reports: San Antonio Number 31 out of 34 Cities in Homebuyers Dissatisfaction
S.A. home buyers less satisfied
In national survey, city falls from 10th to 31st. Homeowners here went from being generally thrilled last year to among the least-satisfied customers in the country this year, according to a report released Wednesday by J.D. Power and Associates. San Antonio customers reported more problems in their houses -- an average of 15.75 this year compared with 12.74 last year.  Nationally, though, the quality of home building improved. Typical home buyers found 14 problems with their home,..The country's happiest home buyers were in Minneapolis, where people reported an average of seven problems per home.  Gordon Hartman ranked last in customer satisfaction. Read more...

Hutto City Council Downplays Lennar Construction Defects
Council discusses construction issues in Hutto Parke
Ways to help residents get their houses fixed and how to improve the image of the neighborhood were broached two weeks ago during a city council workshop in city hall. Dan McDowell, chief building official for the City of Hutto, said the city was notified last March about nails popping out of walls in several Lennar homes. The city subsequently received calls that framing on the some houses had not been completed properly. Some homeowners have said the expansive soil where the subdivision is located is to blame for problems they have with their houses. Read more...

FW Communities worry about fatal explosions, cover-ups’ and gas lines under houses and schools
Cities have little say on Barnett Shale pipelines
Butler and his neighbors have a host of questions about the pipeline: What if it leaks? What will it do to property values?...In some places, such as the rapidly growing areas of far north Fort Worth, neighborhoods are being built on top of existing pipelines. Two pipelines run under the campus of Keller Central High School, which opened in 2003. The same lines run across the as-yet-undeveloped Vineyards at Heritage Park...Davis said the city needs to act because the Texas Railroad Commission, which oversees pipelines in Texas, has dropped the ball on safety. She mentioned a report last month in The Dallas Morning News that the commission watered down a report on defective gas pipe couplings that were involved in several fatal explosions.  Read more...

Texas TRCC Agency Gets Failing Grades AGAIN!
Home construction agency faulted for careless reporting
 Sloppy record keeping by the state agency that investigates complaints about home construction prevented state auditors from measuring key performance criteria, a report released Thursday said. The Texas Residential Construction Commission had inaccurate or incomplete data on four of seven performance measures, including the number of disputes between homeowners and builders it closed and the length of time it took to resolve disputes, auditors found. The report also said the commission underreported telephone calls to its toll-free help lines and overcounted the number of Texans receiving in-person assistance. Related Report: Texas Comptroller Condemns TRCC Builder Protection Agency-Recomends to blast TRCC be blasted off bureaucratic books

TEXAS Warning: Unlicensed Criminals could be servicing your Heating and AC System
Local 2 Investigates Uncovers Heating, Air Workers Avoiding Background Checks
Violent felons, ex-prisoners and other criminals are finding work as heating and air-conditioning contractors, thanks to a loophole uncovered by Local 2 Investigates.An ex-convict who had just finished serving a 35-year prison term was caught by Local 2 Investigates' hidden cameras, buying crack cocaine from what Houston police describe as a heavily armed gang. He was driving an air-conditioning repair truck, in between house calls for a Houston company. Read more...

Setback to the powerful real estate industry
Home inspection limits scuttled
Plan to stop inspectors from suggesting repairs in their reports had support of real estate industry. State regulators on Friday reversed a decision to streamline home inspection reports, dealing a rare setback to the powerful real estate industry. The about-face followed increasingly vocal outcry from home inspectors and Gov. Mike Easley, who warned that the rule change could harm consumers.  Read more...

KB Home Campaign Contributions Questioned
Council members accuse critics of Runkle rousing
Despite recent limited test results saying the area- which sits adjacent to the former Santa Susana Field Laboratory- poses no immediate threat to the public, some residents continue to assert the site is unfit for development due to high levels of radioactive and toxic heavy metal contamination, and they are demanding a new Environmental Impact Report be completed... Serafine asserted at the meeting that 70 percent of campaign contributions made to some council members came from Boeing, KB Home and other businesses tied to the Runkle Ranch development.  Related News: Worst Nuclear Meltdown Site in History - Dust In The WindStopRunkledyne.com   Read more...

Rough Times - Home builders mothball projects
Home builders mothball projects
As troubles rise, major several Sacramento-area builders are shutting down. Pardee Homes has halted its planned 660-home Natomas project, but has $200 million invested in the region and has future plans. Read more...

TRCC: Report Shows Controversial State Agency Fails Again
The State Auditor reports that the controversial Texas Residential Construction Commission (TRCC) reported unreliable results on four out of seven key measures mandated by the legislature. The auditor conducted the report to certify that the agency is meeting the performance measures laid out by the legislature.  According to the auditor’s report, the TRCC failed to properly maintain its records and failed to follow written policies, and miscalculated expenditures.  Because of these deficiencies, the auditor was unable to certify that the agency was meeting its goals. Read more...

Lennar Employee of homebuilder cited for peeping in Hutto
Lennar worker admitted to police he was looking in bathroom windows
Hutto police say a man accused of looking into people's bathrooms in a subdivision last week has turned himself in. Dwayne Keith Campbell, 40, worked for the national home builder Lennar Corp., which constructs residences in the Legends of Hutto subdivision, police said. Campbell initially told police Tuesday that he was checking out the houses as part of his job, Police Chief Harold Thomas said. Read more...

Lennar Employee of homebuilder cited for peeping in Hutto
Peeping Tom In Hutto Turns Himself In
There are new details regarding a story KXAN Austin News reported Tuesday news. That Peeping Tom in Hutto has turned himself in. Police were called out to the Legends of Hutto subdivision twice last week after residents reported seeing a man looking into bathroom windows. On Tuesday, the suspect walked into the Hutto Police Department, where he confessed to peeping. Police have charged Dwayne Cambell with a Class C misdemeanor. He was an employee of the homebuilder, Lennar Homes.

Lennar Inspector Inspects Windows
Police Looking For Peeping Tom In Hutto 
Police are searching for a Peeping Tom in Hutto after neighbors spotted a man looking into bathroom windows twice last week...The man said he worked for Lennar Homes and was just doing a home inspection... Some neighbors said they have seen Lennar employees inspecting early but not like this. "For them not to stop and say, 'I got your information. I'm inspecting this house.' Why didn't he just show it and say, 'This is my identification,' and that's unusual for him to have done, just to take off," said neighbor Emily Ojeda. Read more...

NC Subdivision Developer builds bulkhead & road in the Wetlands, without permit!
condition that the Developer had NO FUTURE PLANS TO SUBDIVIDE HIS PROPERTY unless he were able to establish an ALTERNATIVE ACCESS EASEMENT...Here is precisely why the Summer Rest Road Community was so insistent that New Hanover County Code Enforcement Services Division ENFORCE the regulations and laws on the books and STOP the developer from Illegally building a bulkhead and road in the Wetlands, WITH NO PERMIT!!!!!  Of course, with the help of the County, Mr. Miller was graciously granted a permit for the bulkhead many months after construction was complete, despite the confirmation by Jonathan Graham, Director of County Code Enforcement Services (ON VIDEO TAPE!!!)  that Mr. Miller had broken the law.  Read more...

Ryland Homes Rated as Junk - Any Buyers?
Ryland Facing ‘Junk’ Rating
Moody's Investors Service may cut its credit rating on Ryland Group Inc. into junk territory, citing concerns about the home builders' ability to cut inventory and generate positive cash flow, the rating agency said Monday. The Calabasas homebuilder and rival D.R. Horton, the largest U.S. homebuilder, have struggled recently to generate cash flow, “in part because of their limited success to date in reducing inventory, in part because of continuing high cancellation rates, and in part because of the fiercely competitive environment the two companies face in most of their markets,” according to a Moody's statement.  Read more...

Big Crimes, Giant Profits, Small Penalties for Crimes
Six Builders to Pay $1.4 Million in HUD Settlement
The U.S. Department of Housing and Urban Development (HUD) announced earlier this week that it reached settlements with six home builders who allegedly established title insurance companies that took payments for a portion of the insurance risk. The agreements stem from alleged violations of the Real Estate Settlement Procedures Act (RESPA) and total nearly $1.4 million. According to HUD, captive title reinsurance is "a practice whereby a title insurance company transfers a portion of the risk and title premium to a company owned by the builder, lender, or real estate broker referring the title business."...The latest settlements with builders included Pulte Homes, KB Home, Beazer Homes USA, Meritage Homes Corp., the Ryland Group, and Technical Olympic USA (TOUSA).  Read more...

Builder Kickback Scams Rewarding
Pulte, other builders settle kickback claims
Pulte Homes Inc. and KB Home are among six home builders that agreed to pay a total of $1.4 million to settle federal investigations into whether they accepted rebates from insurers for referrals when selling homes. which ended as part of the settlements, are among hundreds being conducted by states and the U.S. Department of Housing and Urban Development into payments by title insurers. State regulators found the referral payments -- to real estate agents, developers, lenders and builders -- led to higher closing costs for consumers. Read more...

Cisneros HUD Ex-Sec., Ex-KB Home Board Member, Quits Countrywide Board
Cisneros quits Countrywide board
Cisneros had served on the board since 2001. He earned $358,966 as a Countrywide director in 2006, according to a company filing. His departure was announced before Countrywide on Friday announced a $1.2 billion loss in the third quarter, triggered by the worst U.S. housing slump in more than 15 years. But because the company said it would be profitable in the fourth quarter and in 2008, its shares rose more than 32 percent Friday to close at $17.30.  In San Antonio, Cisneros, 60, is executive chairman of CityView, a company that provides financing for urban home builders. Read more...

CNN Money: For sale: 2 million empty homes
Number of vacant homes on the market nationwide equivalent to all homes in Detroit; another sign of weak housing market
The number of vacant homes for sale rose in the third quarter, according to the latest government reading that casts new harsh light on the weakness of the housing market. The Census Bureau report puts the number of vacant homes for sale at 2.07 million in the period, up about 2 percent from the second quarter, and 7 percent above year ago levels. Read more...

KB Homes building cover-up continues to get deeper
New Mirasol Development Leader Has Hands Full
The first man on the job quit after two months, and three potential replacements said thanks but no thanks. Only a former major homebuilder was willing to take on the task of saving Mirasol homes. What sounds and looks like an average neighborhood is part of a long-running customer service nightmare. Pulte Homes former division president Bart Swider will now try to undo years of shoddy construction by another builder, and to make matters even more difficult, mold contamination was found at other Mirasol projects. Read more...

Janet Ahmad, President
HomeOwners for Better Building

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Corruption Led to
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Rise and Fall of Predatory Lending and Housing

NY Times: Building Flawed American Dreams 
Read CATO Institute: 
HUD Scandals

Listen to NPR:
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Gretchen Morgenson : How 'Reckless' Greed Contributed
to Financial Crisis - Fannie Mae

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Washington Post
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Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Consumer Affairs Builder Complaints

 TRCC Implosion
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 Sunset Report

As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

TRCC from Bad to Worse
Case of the Crooked House

The Pat and Bob Egert Building & TRCC Experience 

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