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  #1  
Old 05-10-2009, 11:13 AM
Restrain Restrain is offline
 
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Default KB Homes, Countrywide racketeering charge

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 by Restrain : 05-10-2009 at 12:55 PM. Reason: Expansion of detail
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  #2  
Old 05-10-2009, 01:00 PM
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Lobo Fan Lobo Fan is offline
 
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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 by Lobo Fan : 05-10-2009 at 01:14 PM.
  #3  
Old 05-10-2009, 01:09 PM
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Terrel L. Shields Terrel L. Shields is offline
 
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Quote:
B of A is regretting that buyout of CW? It surely opened the door for a lot of problems.
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.
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  #4  
Old 05-10-2009, 01:16 PM
NORTON NORTON is offline
 
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I can see how Cuomo drew the conclusion that AMC's were the best way out of this mess!
  #5  
Old 05-10-2009, 02:19 PM
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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  
Old 05-10-2009, 03:38 PM
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OSU Beavers OSU Beavers is online now
 
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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.
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  #7  
Old 05-10-2009, 04:58 PM
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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  
Old 05-10-2009, 05:50 PM
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Quote:
Originally Posted by Lobo Fan View Post
There is a small KB development in my town that has a huge foreclosure rate.
What KB development doesn't have a high foreclosure rate?
  #9  
Old 05-10-2009, 06:28 PM
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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  
Old 05-12-2009, 10:09 PM
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Quote:
Originally Posted by Lobo Fan View Post
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?
There's no way to know, is there?
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