KB Home

KB was the 5th largest builder of homes in 2006, had 31,124 closings, and made $11,004,000,000 in profit that year. Unfortunately, we believe that KB and other large corporate homebuilders put its profits ahead of the long-term sustainability of the industry by inflating home prices, steering homebuyers into unaffordable mortgage and cutting corners on construction.

According to a class action lawsuit filed in US District Court on May 7, 2009, KB
Home, Countrywide and Landsafe, along with their network of staff and fee appraisers
formed and operated a criminal enterprise. Their inflated appraisal scheme, inflated the
purchase price of KB Home properties and the loan amounts of Countrywide loans. By corrupting the appraisals this way, it assured the appraisals would always indicate a market value at or above the contracted sale price for the property.

According to the lawsuit, KB Home is and was in a position to refer and direct each of
its customers to purchase thousands of dollars in real estate settlement services such as
mortgage lending services, title insurance and escrow services. Countrywide, one of the largest lenders for home loans in the country, and KB Home, formed a joint venture, "Countrywide-KB." Countrywide KB controlled the purchase and lending
process as well as captured every settlement service fee for KB Home sales. Landsafe is an appraisal service and is an owned subsidiary of Countrywide.

According to the lawsuit, these three entities operated a criminal enterprise through the
Countrywide-KB joint venture. The criminal enterprise built, financed, appraised and controlled every aspect of a buyer's real estate transaction. This put KB in a position to rig and falsify the appraised value of the homes they were selling and financing.
The lawsuit alleges that homebuyer's home appraisals were tainted with false and misleading data, deceptive practices, and other violations of Regulatory standards. The
homeowners involved in the lawsuit were brought together by the Alliance for Homebuyer Justice, a group founded to fight deceptive practices in the homebuilding
industry.

In a separate action, KB homeowners working with the Alliance for Homebyuer Justice have filed complaints with the State Attorney General in California and the Banking Commissioner in North Carolina insisting that KB Home engaged in deceptive practices, made false statements and also concealed information in violation of state consumer protection laws.

If you believe you were taken advantage of by KB Home and its subsidiary mortgage company, please contact the Alliance for Homebuyer Justice.