Home Front

A blog about the economy and the Sacramento-area real estate market.

June 17, 2009
Two sue KB Home-Countrywide, alleging artificial price inflation

A Seattle law firm filed a lawsuit earlier today in U.S. District Court in Los Angeles, alleging that the LA-based building giant (always in the top five for sales here in Sacramento) illegally conspired to inflate values of its homes for sale as the market began to tumble in California in 2006 and 2007. Countrywide was KB's in-house lender.

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Here's a copy of the lawsuit filed today.

A similar suit has been filed in Arizona. Both KB and Bank of America, which has since bought Countrywide, say the suit is "without merit."

The plaintiffs are from Mentone in San Bernardino County and Tehachapi in Kern County. The law firm aims to make this a class action suit, saying KB built 15,000 houses in California during the time specified in the lawsuit. Almost 1,700 of those homes were here in the six-county Sacramento region.

Here's also a story that ran in The Las Vegas Sun last month saying that a laborers' union aiming to organize residential construction workers provided the research to the Seattle law firm.  (Thursday update: June 18):  I also just got off the phone with Dawn Page, spokeswoman for the International Laborers' Union of North America, who confirmed the union and its affiliate, the Alliance for Home Buyer Justice, provided the research for the California suit to the Seattle firm.

 Photo: blog.redfin.com

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