Homebuyers, union allege deception by builders

By Steve Green

Thursday, Sept. 24, 2009 | 3:33 p.m.

A group of 18 homebuyers and the Laborers International Union of North America charged Thursday in Las Vegas that Pulte Homes Corp. and other builders harmed buyers during the housing boom by inducing them into purchasing homes at inflated values and with unaffordable mortgages.

During a news conference organized by the union they asked the Nevada Attorney General's office to take action on complaints alleging deceptive sales and lending practices.

A union press release said Constance Consentino, one of the homebuyers filing complaints, purchased a Pulte home in Las Vegas in 2007 with a 20-percent down payment and a good credit score. The union alleged Pulte inflated the home price, used incentives to steer her to Pulte’s lending affiliate and failed to disclose important mortgage terms, particularly that their interest rate could increase after seven years.

A Pulte spokeswoman on Thursday said the company has not seen the specific claims so it is not in a position to respond to specific allegations.

"It appears this is just another staged effort that is part of a campaign orchestrated by unions trying to organize the homebuilding industry and specifically workers employed by several of our subcontractors. We believe this is part of a negative harassment campaign that seeks to target Pulte for publicity purposes and impact our good reputation. For several years now, these union groups have been involved in an ongoing harassment campaign against Pulte Homes. They stage events and make sweeping unfounded claims to try and establish distrust and get publicity," Pulte and Del Webb Communities spokeswoman Jacque Petroulakis in Scottsdale, Ariz., said in a statement.

In May, the union was involved in the filing of a lawsuit with similar allegations against KB Home and Countrywide Financial. That suit claimed they inflated home values and appraisals in Nevada and Arizona. KB Home and Bank of America, which now owns Countrywide, have denied the allegations.

Besides Pulte, Thursday's complaints involved Pulte's newly acquired Centex division as well as Lennar Corp and KB Home. The union has also been critical of lending associated with other homebuilders including D.R. Horton, Beazer, Ryland and Richmond American.