Pulte Homes Inc. and KB Home are among six home builders that agreed to pay a total of $1.4 million to settle federal investigations into whether they accepted rebates from insurers for referrals when selling homes, Bloomberg News reports.
The kickback investigations, ended as part of the settlements, are among hundreds being conducted by states and the U.S. Department of Housing and Urban Development into payments by title insurers. State regulators found the referral payments — to realtors, developers, lenders and builders — led to higher closing costs for consumers.
Pulte, the third-largest U.S. homebuilder by revenue, and KB Home, the fifth-biggest, agreed to pay $466,000 and $456,000 respectively to settle the probes without admitting wrongdoing, the federal housing agency said in a statement today.
The top five U.S. homebuilders have written down land and recorded other charges totaling $5 billion in their most recent quarters, and have reported a total net loss of $2.8 billion. New home sales are projected to fall to the lowest pace since 1997 and there’s an eight-month supply of homes for sale in the U.S.
The other builders that settled were: Beazer Homes USA Inc., the ninth-largest U.S. homebuilder, which agreed to pay $261,000; Ryland Group Inc. agreed to pay $84,000; Meritage Homes Corp. agreed to pay $66,000; and Tousa Inc. agreed to pay $52,000.
