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KB Homes, Countrywide racketeering charge

Discussion in 'General Real Estate and Real Estate Finance' started by Restrain, May 10, 2009.

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  1. Restrain

    Restrain Elite Member

    18
    Jan 22, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    KB Homes and Countrywide hit with $2.8 Billion racketeering charge. Charge alleges that CW, in collusion with KB Homes, hand-picked appraisers to inflate values some $20-30K per home, making the homeowners upside down immediately on closing.

    http://moneynews.newsmax.com/
     
    Last edited: May 10, 2009
  2. Lobo Fan

    Lobo Fan Elite Member

    0
    Nov 28, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    I wonder if B of A is regretting that buyout of CW? It surely opened the door for a lot of problems. There is a small KB development in my town that has a huge foreclosure rate. I haven't looked lately but the last one I did in there was very ugly. A lot of nothing down deals even for investors. Those chickens are coming home to roost.

    I know I only lasted through one appraisal on the KB/CW team. I refused to call a 3' x 5' piece of concrete out the back slider a patio. I referred to it as a stoop. The KB sales agent called just screaming because that little POS was an upgraded patio in their alternate universe. I told her to make it big enough to handle a lawn chair and a Weber and perhaps I would consider it. Oooh she was mad at me. First and last I ever did, Some appraisers made some real money off that deal, but not me.
     
    Last edited: May 10, 2009
  3. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    302
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    B of A have made a couple of really bad acquisitions...too bad. I think they figured this 'crisis' was overblown at the time of the CW buyout and they' d make a killing...they are finding out day by day how really crooked this outfit is.
     
  4. NORTON

    NORTON Senior Member

    0
    Oct 10, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I can see how Cuomo drew the conclusion that AMC's were the best way out of this mess!
     
  5. Lobo Fan

    Lobo Fan Elite Member

    0
    Nov 28, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    I think if you killed one deal or even slowed it down you were off the KB list. I have noy much use for KB anyway. I had a cold one to celebrate when they pulled out of NM. The problem with those new developments was once they got the first few to close, there were your comps. They should require at least 3 comps outside the development that resold at least once. It is the resales that really set the market, not those bogus developer comps.
     
  6. OSU Beavers

    OSU Beavers Elite Member

    7
    Jan 10, 2007
    Professional Status:
    Licensed Appraiser
    State:
    Oregon
    The lawsuit claims developers and lenders colluded to overprice as many as 14,000 homes in the two states by an average of $20,000, for an estimated total of $2.8 billion between 2006 and the present. Damn that is BIG money!

    I guess our 300+/- homes built in Eastern Oregon by a Metro area developers from 1995 to 2003 and appraised by a Portland skippy for 10% to 20% over value will never see the light of day.
     
  7. Lobo Fan

    Lobo Fan Elite Member

    0
    Nov 28, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    I think we have all seen it before. A builder is able to prop up the prices until they sell out. Then the market finds it's own level. The people that bought, especially late are really screwed. Kinda like being the last ones in on a Ponzi scheme.
     
  8. Workbox

    Workbox Elite Member

    2
    Mar 2, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    What KB development doesn't have a high foreclosure rate?
     
  9. Lobo Fan

    Lobo Fan Elite Member

    0
    Nov 28, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    Good point. More of our tax dollars at work. If they win a big settlement will it come out of B of A TARP money?
     
  10. c w d

    c w d Senior Member

    0
    Oct 2, 2006
    Professional Status:
    General Public
    State:
    Florida
    There's no way to know, is there?
     
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