• Report: #327982

Complaint Review: KB Home

  • Submitted: Tue, April 22, 2008
  • Updated: Sun, October 17, 2010

  • Reported By:vero beach Florida
KB Home
10990 Wilshire Blv, Los Angeles, California U.S.A.

KB Home ,Kb Home development 30% in default after selling 65% of homes to non-owner occupants & not disclosing Los Angeles California

*Author of original report: KB Home subdivision now up now 65% in DEFAULT

*General Comment: KB Home Lawsuits

*Consumer Suggestion: KB Home in Florida Under Investigation

*Consumer Comment: I was also ripped off by KBhomes,KBCountrywide and Landsafe

*Consumer Comment: I was also ripped off by KBhomes,KBCountrywide and Landsafe

*Consumer Comment: I was also ripped off by KBhomes,KBCountrywide and Landsafe

*Consumer Comment: I was also ripped off by KBhomes,KBCountrywide and Landsafe

*UPDATE EX-employee responds: KB Home Culture of Corruption

*Author of original report: KB Home answer to Cody in Texas

*Author of original report: KB Home answer to Cody in Texas

*Author of original report: KB Home answer to Cody in Texas

*Author of original report: KB Home answer to Cody in Texas

*Consumer Comment: Got That Beat

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The KB Home development where I purchased is currently 30% in default. I beleive this is one of the highest default rates in our small county in Florida (Vero Beach). In comparison the county foreclosure rate is around 2% currently. Values have decreased 50-60% in the subdivision. According to local data values are currently down about 17% in our county overall. This KB development (Carriage Lakes)far surpases anything in the community for troubled properties as far as I can determine.

The development was sold to 65% non-owner occupants (mostly speculators) and not only was it not disclosed to legitimate buyers like myself (or lenders) , but we were required to sign an agreement that homes were to be occupied by buyers. I feel this was very deceptive.

KB/Countrywide wrote appx. 63% of the loans on these non-owner occupied homes, so had to know they were not to be occupied. I have checked with county records & most have the mortgage riders showing they were non-owner occupied. They were selling 2, 3, & 4 homes to the same buyers. What did KB think these buyers were doing? 20% were "flipped" in a few months while the builder was still present & another 20% were for re-sale right away. Why were buyers like myself required to sign an owner occupied agreement & told at the time it was their standard contract? Was it to mislead me into thinking this developement was owner occupied when in fact it was not? KB has denied to me that they had everyone sign this agreement, yet I have a quote in the WSJ where KB Home states they had buyers sign the agreement to stop speculation. Which is it?

The non-owners have not maintained their properties & have flooded the market with resales before the builder even left. Now 30% of the homes in the subdivision are in default & the numbers are climbing.

I paid $309,000 for my house. The house next door sold for $320,000. It is currently re-listed for $145,000. This is typical of the other homes sold or for sale in this sub. Nothing but short sales or forclosures are being sold for the past year in the subdivision.

KB also left the developent without the required landscaping, & many of the the homes I am aware of have leaking roofs & walls or plumbing problems. There are pot holes in the roads (2 years old), and we have found the road has 1 inch of pavement, not the level required by code. The homeowners have constant battles with tenants, non-payment of fees, lack of maintneance & abuse of the community thanks to the non-onwer occupied presence. Plus many are now just walking away & abadoning their properties.
.
KB had the largest HUD fine & settlement in history for mortgage violations in 2005. There were 13 violations involving a number of poor underwrting practices, involving approving loans to borrowers who were not eligible, overstated or incorrect income statements, failure to include all borrowers' debts, etc (from HUD news release No.05-093) . This is not a HUD development, so one must wonder if they did the same with conventional loans? Is this an on-going pattern of KB Home? Could this fall under Rico? I do not know.

KB currently is being sued by a former VP who states he was fired for not going along with mortgage & appraisal fraud. (Mark Zachary in Houston TX)

There is a class action forming in CA against KB Home for the same as above (mortgage & appraisal fraud)

We have contacted the FBI regarding the statistics in this sub & they will neither confirm nor deny an investigation is on-going.

Walt
vero beach, Florida
U.S.A.

This report was posted on Ripoff Report on 04/22/2008 09:06 AM and is a permanent record located here: http://www.ripoffreport.com/r/KB-Home/Los-Angeles-California-90024/KB-Home-Kb-Home-development-30-in-default-after-selling-65-of-homes-to-non-owner-occupa-327982. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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REBUTTALS & REPLIES:
1Author 12Consumer 0Employee/Owner
Updates & Rebuttals

#1 Author of original report

KB Home subdivision now up now 65% in DEFAULT

AUTHOR: Mr & mrs dozier - (U.S.A.)

Everything stands from the old report, except the subdivision is now up to 65% in default and values are down 75%!  Despite the addendum stating that KB Home was selling homes to owner occupants (they claimed the majority), the subdivision was from inception 65% non-owner occupants.  One buyer bought nine homes from KB Home locally!  KB Homes stated in WSJ article, paraphrased, "we tried to keep speculators out, but   they even fooled us".   


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#2 General Comment

KB Home Lawsuits

AUTHOR: Kb_investigation - (U.S.A.)

Hi All -

I work with a law firm that's filed class-action lawsuits against KB Home, Countrywide and LandSafe appraisals in three states - Florida, California and Arizona. These lawsuits represent homeowners in FL, NC, SC, AZ, NV and CA.

The lawsuits allege KB Home (NYSE: KBH), Countrywide Financial and LandSafe Appraisal Services conspired to rig housing prices, costing home purchasers millions of dollars, and fueling the collapse of the regions housing market.

 

Anyone who owns a KB Home in these states can join the lawsuit. You can contact attorneys and learn more at www.hbsslaw.com/kbhomes.


I posted on this forum a few months back about the Florida investigation and wanted to update you all that it's now a case.
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#3 Consumer Suggestion

KB Home in Florida Under Investigation

AUTHOR: Kb_investigation - (U.S.A.)

The situation that you find yourself in with KB Home is unfortunately not unique.

I work with a law firm that's launched an investigation into KB Home developments in Florida. Published reports indicate KB worked with Countrywide's appraisers to artificially inflate the appraisal values given to new KB homes.

Under this alleged agreement KB Home receives higher profits from inflated home sales and homeowners suffer large losses and unknowingly pay inflated prices.

KB Home has 76 communities in Florida, including homes in the Daytona, Jacksonville, Lakeland, Orlando, Tampa and SW Florida areas. In the two cases filed in California and Arizona on behalf of homeowners, KB Home inflated sampled appraisals by an average of $82,169 per property.

If you are now or ever were a KB homeowner please visit http://www.hbsslaw.com/kbhomeflorida. You can share your story or learn more about the investigation.
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#4 Consumer Comment

I was also ripped off by KBhomes,KBCountrywide and Landsafe

AUTHOR: Stephanie K - (U.S.A.)

I purchased a KB home in Clermont Fl in Oct of 06- I was steered towards the"in house" finance with promises of $3,000 and time savings. I had used Countrywide for 2 other home purchases so I felt comfortable.. I was not aware that KB/Countrywide was not the same.
KB/ KBcountrywide and Landsafe are all in it together. The builder sets a price, the appraiser makes sure that he appraises for that price or higher, and the lender makes sure that the loan closes... End of story and they all walk away with their money..

My husband lost his job 7 mo after we closed and we needed to put our house up for sale or refi- I hired an independent appraiser and it came in at $310,000. I purchased the home for $421,000! There is NO WAY that a property would loose that much value in 7 months. That was also after we added fencing, solar and saltwater system for the pool and landscaping.

The community that I live in -Lakeview Pointe- was also "sold" to us as a family community. We were looking for a place to raise our children and did not want a rental community. We happily signed the occupancy statement. We were told everyone had to. Come to find out that the majority of the properties were purchased by investors and KB Homes LIED to us.

Not even a year after we closed, they were selling "dumping" the same house as mine for $280,000. Can you say RIP OFF!

These companies conspired together to lie, mislead, and basically steal money from thousands of people. They need to be STOPPED!!!!!!!!!!

Stephanie K
Clermont FL
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#5 Consumer Comment

I was also ripped off by KBhomes,KBCountrywide and Landsafe

AUTHOR: Stephanie K - (U.S.A.)

I purchased a KB home in Clermont Fl in Oct of 06- I was steered towards the"in house" finance with promises of $3,000 and time savings. I had used Countrywide for 2 other home purchases so I felt comfortable.. I was not aware that KB/Countrywide was not the same.
KB/ KBcountrywide and Landsafe are all in it together. The builder sets a price, the appraiser makes sure that he appraises for that price or higher, and the lender makes sure that the loan closes... End of story and they all walk away with their money..

My husband lost his job 7 mo after we closed and we needed to put our house up for sale or refi- I hired an independent appraiser and it came in at $310,000. I purchased the home for $421,000! There is NO WAY that a property would loose that much value in 7 months. That was also after we added fencing, solar and saltwater system for the pool and landscaping.

The community that I live in -Lakeview Pointe- was also "sold" to us as a family community. We were looking for a place to raise our children and did not want a rental community. We happily signed the occupancy statement. We were told everyone had to. Come to find out that the majority of the properties were purchased by investors and KB Homes LIED to us.

Not even a year after we closed, they were selling "dumping" the same house as mine for $280,000. Can you say RIP OFF!

These companies conspired together to lie, mislead, and basically steal money from thousands of people. They need to be STOPPED!!!!!!!!!!

Stephanie K
Clermont FL
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#6 Consumer Comment

I was also ripped off by KBhomes,KBCountrywide and Landsafe

AUTHOR: Stephanie K - (U.S.A.)

I purchased a KB home in Clermont Fl in Oct of 06- I was steered towards the"in house" finance with promises of $3,000 and time savings. I had used Countrywide for 2 other home purchases so I felt comfortable.. I was not aware that KB/Countrywide was not the same.
KB/ KBcountrywide and Landsafe are all in it together. The builder sets a price, the appraiser makes sure that he appraises for that price or higher, and the lender makes sure that the loan closes... End of story and they all walk away with their money..

My husband lost his job 7 mo after we closed and we needed to put our house up for sale or refi- I hired an independent appraiser and it came in at $310,000. I purchased the home for $421,000! There is NO WAY that a property would loose that much value in 7 months. That was also after we added fencing, solar and saltwater system for the pool and landscaping.

The community that I live in -Lakeview Pointe- was also "sold" to us as a family community. We were looking for a place to raise our children and did not want a rental community. We happily signed the occupancy statement. We were told everyone had to. Come to find out that the majority of the properties were purchased by investors and KB Homes LIED to us.

Not even a year after we closed, they were selling "dumping" the same house as mine for $280,000. Can you say RIP OFF!

These companies conspired together to lie, mislead, and basically steal money from thousands of people. They need to be STOPPED!!!!!!!!!!

Stephanie K
Clermont FL
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#7 Consumer Comment

I was also ripped off by KBhomes,KBCountrywide and Landsafe

AUTHOR: Stephanie K - (U.S.A.)

I purchased a KB home in Clermont Fl in Oct of 06- I was steered towards the"in house" finance with promises of $3,000 and time savings. I had used Countrywide for 2 other home purchases so I felt comfortable.. I was not aware that KB/Countrywide was not the same.
KB/ KBcountrywide and Landsafe are all in it together. The builder sets a price, the appraiser makes sure that he appraises for that price or higher, and the lender makes sure that the loan closes... End of story and they all walk away with their money..

My husband lost his job 7 mo after we closed and we needed to put our house up for sale or refi- I hired an independent appraiser and it came in at $310,000. I purchased the home for $421,000! There is NO WAY that a property would loose that much value in 7 months. That was also after we added fencing, solar and saltwater system for the pool and landscaping.

The community that I live in -Lakeview Pointe- was also "sold" to us as a family community. We were looking for a place to raise our children and did not want a rental community. We happily signed the occupancy statement. We were told everyone had to. Come to find out that the majority of the properties were purchased by investors and KB Homes LIED to us.

Not even a year after we closed, they were selling "dumping" the same house as mine for $280,000. Can you say RIP OFF!

These companies conspired together to lie, mislead, and basically steal money from thousands of people. They need to be STOPPED!!!!!!!!!!

Stephanie K
Clermont FL
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#8 UPDATE EX-employee responds

KB Home Culture of Corruption

AUTHOR: Anonymous - (U.S.A.)

I am a former KB Home employee who worked as an on site salesperson and I can tell you it was no mistake KB Home sold a large number of homes to investors many of which are repeat buyers many times over. In fact I had one investor brag that he had purchased over 50 homes from KB in both Florida and California and had barrowed over $600,000 against the equity in these homes.

The majority of subdivisions built by KB Home did infact have a clause in their contract stating that you must purchase as a owner occupant and live in the home for atleast 1 year and cannot be an investor non owner occupant. You would think KB Home did this to protect the families who purchased as owner occupants but infact in my opinion they did this to protect their investors. Why? Because they knew if owner occupants were aware that they were selling to non owner occupant investors, your typical owner occupant family would never purchase a home in that subdivision.

To make it worse they conspired with Countrywide Home Loans to keep this secret and in return for the business Countrywide would overlook the clause and knowingly finance non owner occupant properties. Many of the investors put no money down and qaulified on whats known as a No Doc loan or Nina loan which simply means the investor does not have to provide any documets showing assets, income or financials. Often times the loan officers would suggest what income an investor would need to state on their application and thats what the investor would put down.

All owner occupants in any KB Home neighborhood where this corruption took place should call their State Attorney General, Congresmen and Senators and tell them they owe you justice by throwing these crooks in jail and hit them with multi billion dollar fines. I would encourage class action lawsuites against KB and Countrywide. KB Home and Countrywide told people they were buying the American Dream and instead sold them the American Nightmare.
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#9 Author of original report

KB Home answer to Cody in Texas

AUTHOR: Mr & mrs dozier - (U.S.A.)

We are in Florida. I have heard about the development in San Antonio you speak of. I am not 100% certain, but I think this is the development that Hud investigated for mortgage "irregularities" which resulted in the massive fines & settlement. Looks like they are still at it.
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#10 Author of original report

KB Home answer to Cody in Texas

AUTHOR: Mr & mrs dozier - (U.S.A.)

We are in Florida. I have heard about the development in San Antonio you speak of. I am not 100% certain, but I think this is the development that Hud investigated for mortgage "irregularities" which resulted in the massive fines & settlement. Looks like they are still at it.
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#11 Author of original report

KB Home answer to Cody in Texas

AUTHOR: Mr & mrs dozier - (U.S.A.)

We are in Florida. I have heard about the development in San Antonio you speak of. I am not 100% certain, but I think this is the development that Hud investigated for mortgage "irregularities" which resulted in the massive fines & settlement. Looks like they are still at it.
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#12 Author of original report

KB Home answer to Cody in Texas

AUTHOR: Mr & mrs dozier - (U.S.A.)

We are in Florida. I have heard about the development in San Antonio you speak of. I am not 100% certain, but I think this is the development that Hud investigated for mortgage "irregularities" which resulted in the massive fines & settlement. Looks like they are still at it.
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#13 Consumer Comment

Got That Beat

AUTHOR: Cory - (U.S.A.)

There's one subdivison of over 100 homes, in SA that has a 65+% dafault rate. I don't know if it's a KB or not, but it wouldn't surprise me. Was your home built out in the county? Many are so they can avoid city codes. They con people into these spots under the guise of no city taxes. What they really are is no city codes or protections. Read an article the other day about how some banks are no longer loaning on houses outside city limits, just for that reason. The number of defaults are much higher on county properties then city homes.
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