KB Home Dubious Mortgage Companies
KB Home Dubious Mortgage Lending Practices
KB Home has a history of changing their mortgage subsidiaries after they get in trouble.
New KBHS Mortgage Company 2017
KB Home has a checkered past in the lending business. The latest company is KBHS. It is new and unknown. Seems like every time they get in trouble with regulators, KB Home bails and forms a new company. The latest partner is Stearns Lending, a private mortgage lender. Stearns has 81 complaints filed with the Consumer Financial Protection Bureau (CFPB), which may or may not be significant based on their size.
The newly branded partnership KBHS was formed in 2017. If the past is any indication, consumers could find themselves wishing they got their mortgage from an outside lender.
KB Home Nationstar Partnership – Home Community Mortgage –
Before KBHS was formed, KB Home partnered with Nationstar Mortgage, and branded this company Home Community Mortgage. Home Community Mortgage has 297 complaints logged with the CFPB. Nationstar has an astounding 18,000 complaints with the CFPB.
In 2017 the CFPB fined Nationstar $1.7 million for flawed mortgage loan reporting. Looks like this is the time KB Home bailed.
Countrywide Mortgage – Appraisal Fraud Scheme
Before the Nationstar partnership, KB Home partnered with the notorious Countrywide Mortgage in 2005. This was about the time that HUD hit KB Home’s own mortgage company with a huge fine. They probably bailed on their own bad reputation and jumped ship to Countrywide.
Countrywide was one of the main causes of the 2008 financial crisis and mortgage meltdown almost plunging the world economy into a depression. The thuggish, leather faced founder and CEO of Countrywide, Angelo Mozilo, was the poster boy for corruption. He was personally fined $67 million dollars by the SEC for securities fraud. HUD had a $32 million dollar settlement against Country Wide. But like most bankers, he pretty much got off for his part in the mortgage crisis.
Countrywide/KB Home partners in crime
Countrywide and KB Home did partner in more than lending. They partnered in crime. Countrywide funded as many houses as KB Home could slap up in the housing boom. Two separate whistle blowers filed suits against the KB Home/Countrywide partnership for a “ nationwide appraisal fraud scheme.” The DOJ joined the qui tam suit and a settlement was reached. They found that KB Home had inflated appraisals by on average $80,000 per home. There was an exclusive group of appraisers approved by KB Home. One appraiser made more money in a week than most appraisers make in a year inflating values which instantly left homeowners $80,000 underwater on their loans. Bank of America unwittingly bought Countrywide by the time the whistle blower suits were filed. ABC news appraisal fraud.
KB Home Mortgage (another mortgage company) – Fined by HUD
In 2005 HUD levied an historic fine of $3.2 million dollars against KB Mortgage for falsely certifying that it had personally underwritten mortgages, when it had not. HUD alleged 13 violations by KB Mortgage Company from poor underwriting practices such as approving loans to borrowers who were not eligible; approving loans based on overstated or incorrect income; failing to include all of borrowers’ debts; failing to properly verify sources of funds; and, failing to ensure gift letters met HUD requirements. HUD archive.
Before the ink was dry on the HUD fines, KB Home had partnered with Countrywide Mortgage to peddle their homes.