Pulte Homes' lending is under scrutiny
A legal battle is under way between the Arizona Attorney General's Office and one of the state's biggest homebuilders, Pulte Homes. Details on the Arizona attorney general's investigation aren't public while the investigation is ongoing, but the Pulte lawsuit indicates the state prosecutor is looking into the builder's lending arm. According to the lawsuit, Pulte has provided the Attorney General's Office with 70,000 pages of documents. Both Pulte Homes and Pulte Mortgage are plaintiffs in the lawsuit.

The Arizona Republic
Pulte Homes' lending is under scrutiny
by Catherine Reagor - Mar. 26, 2010

A legal battle is under way between the Arizona Attorney General's Office and one of the state's biggest homebuilders, Pulte Homes.

The office is investigating Pulte's operations, including its lending practices in Arizona, and Pulte is suing Attorney General Terry Goddard over the lawyers whom the state prosecutor hired to help handle the case and how those lawyers are getting paid.

Details on the Arizona attorney general's investigation aren't public while the investigation is ongoing, but the Pulte lawsuit indicates the state prosecutor is looking into the builder's lending arm.

According to the lawsuit, Pulte has provided the Attorney General's Office with 70,000 pages of documents. Both Pulte Homes and Pulte Mortgage are plaintiffs in the lawsuit.

"In most cases, we would not comment on an ongoing investigation, but since Pulte filed this lawsuit, the investigation is obviously public," said Susan Segal, a lawyer with the attorney general's consumer fraud unit who is handling the Pulte investigation.

She said the investigation was launched into Pulte's operations last year after the Attorney General's Office received numerous complaints from Pulte homeowners about the loans they received through the builder.

In Pulte's lawsuit, filed in the U.S. District Court in Washington, D.C., the homebuilder is alleging the outside counsel hired by the Arizona attorney general has ties to the Laborers' International Union of North America. The suit says that union has targeted Pulte and other homebuilders with a "harassment campaign" to force the builders' subcontractors to join the union.

Pulte said the union has been trying to contact people unhappy with Pulte over the home loans.

The Nevada Attorney General's Office, which is working with Arizona on the investigation into the homebuilder, is also named in the suit.

Pulte has issued this statement about its lawsuit, filed in early March:

"The states of Arizona and Nevada have taken the unusual step of outsourcing their investigations to a District of Columbia law firm. The firm, Cohen, Milstein, Sellers & Toll, which holds itself out as a 'pioneer in plaintiff class-action lawsuits,' has a conflict of interest because it also represents private parties, including a labor union, in matters adverse to the company (Pulte) and other homebuilders."

Segal, of the Arizona Attorney General's Office, said lawyers from Cohen, Milstein have assured both the Arizona and Nevada attorney generals that they no longer represent LIUNA, the contractor trade union that Pulte is concerned about in its lawsuit.

The homebuilder also alleges in its lawsuit that the way Arizona is paying Cohen, Milstein is illegal because it's based on contingency fees. That means the law firm will only receive payment for services if the investigation results in financial penalties that Pulte must pay.

No hearing date on the lawsuit has been set, and the Arizona attorney general's investigation into Pulte is ongoing.
http://www.azcentral.com/business/articles/2010/03/26/20100326pulte-homebuilder-ariz.html