The Pulte Homes Blog

Pulte Cutting Employees Again, Sign of A Failing Company

2011-05-19T21:08:00.001-04:00

BY ROBBIE WHELAN AND DAWN WOTAPKA

PulteGroup Inc., the country's second-largest home builder by annual sales, is terminating as many as 10 executives at the divisional president level or higher as part of a management-consolidation plan.

The total number of layoffs has yet to be determined. At the end of last year, the builder had 4,363 employees, about one-quarter the number it had during the real-estate boom, in 27 divisions.

The move comes as the country's home builders struggle to generate profits amid weak demand and a particularly disappointing spring selling season.

Bloomfield

The Ingredients of A Strong Brand

2011-03-24T12:43:00.000-04:00

Branding! Branding! Branding! Everyone uses the word, but they rarely tell you what makes up a good brand and what 'branding' covers. Silly really, when you can't design one or know if you have a good one without knowing what they consist of. So let's do that, shall we? Let's see what kind of list we can put together.

A strong brand has...

A Logo

But not just any logo. A strong brand has a logo that's memorable, noticeable, and says something about the company and what's important to it. This appears on the website and anything else it fits on. Like the coat of arms or wax seal of royalty, the logo becomes a seal of approval and ownership.

A Tagline

That catchy, memorable bit of text that says what your company stands for. It's almost like the summary of a strong brand and the text version of a logo. In fact, when it's incorporated into a company in just the right way, customers can recall it just as easily, if not more easily than the logo itself.

A Design

A company can go through several stationary or website designs. Even brick and mortar stores can have several design changes, but regardless of what type of design it is or where it's found, the feeling, traits, and images it provokes are the brand.

A Font

Users assess it subconsciously, business owners often brush it off.

How to draw you're customers in:

It doesn't matter what you're selling, the fact is that when you run a business, you're in the business of selling first and providing a product or service second. This makes it important for every business owner out there to think of a way to draw customers in and to make them interested in your products. This means marketing and advertising; while small businesses may not have the resources to what some of the larger companies out there do, what they do have is the examples that have been set for them by the most successful giants in their industry.

Buying a New Home Means Paying More; Here's Why

2011-03-23T19:03:00.000-04:00

Buyers of new homes plunged in February to the fewest on records dating back nearly half a century, and new home prices are now 30 percent higher than of those being resold _ twice the markup in healthy housing markets.

Click Here For Video

Did Pulte Buy Centex Too Soon?

2011-02-28T22:54:00.000-05:00

Everyone has heard the arguments: Pulte bought Centex too soon. It paid too much money. The deal added too much debt to Pulte’s balance sheet. And why add market share when there’s no market in which to sell?

But the litmus test could be whether Pulte can pull off its branding strategy in an industry sector that mostly has resisted name-brand marketing.

Pulte is assigning a brand to every piece of dirt it owns or controls: Centex for entry level lots, Pulte for first move-up, Del Webb for active adult, and “TBD” (apparently a brand still in formation) for luxury products. Pulte now controls the marketing, sales, construction, and design of its products corporately, leaving its areas and divisions to focus on land acquisition and customer service.

Since the merger, Pulte Group has paid down nearly $2 billion in debt and made optimistic projections about synergistic operational savings.

Pulte's Merger With Centex Homes Not A Good Decision

2011-02-21T20:15:00.002-05:00

Pulte has yet to return to consistent profitability after the $1.3 billion merger, and acquisition of Centex Homes, which created the largest home builder by home closings. Since then Pulte has turned a profit in just one of six quarters, and has taken nearly $1 billion in write-downs. And Pulte’s profit margins and stock performance have trailed the other builders.

Pulte Homes Loses Almost $1 Billion in Third Quarter

2011-02-21T20:01:00.003-05:00

Want to know how the new homes construction market is doing?

Forget about the statistics. Pay no attention to weekly rising or decreasing sales numbers. Ignore prognostications from the trades groups.

Just study the newest third-quarter performance data from one of the largest homebuilders in the U.S. - PulteGroup Inc. of Bloomfield Hills, MI.

The Michigan-based builder lost nearly a billion dollars. Pulte booked $986 million in charges and orders declined, underscoring the home-building sector's continued problems.

With the housing market expected to weaken further next year, Pulte said it will slash costs by about $100 million by consolidating divisions and reducing staff, The Wall Street Journal reported.

Richard Dugas Jr.
"We're frustrated...to be bumping around at the break-even level--a little bit above, a little bit below at any given quarter--on our core business, and that's not acceptable," Pulte CEO Richard Dugas said in a conference call with analysts.

"We want to be solidly profitable, so that's why we're taking the actions."

Pulte's cost cutting comes as home builders are battling a multiyear downturn. Earlier this year builders thought their fortunes were improving.

But that confidence came from the federal government's tax credit of up to $8,000 for first-time home buyers. Since the credit ended April 30, home purchases and home-construction orders have dropped.

Several builders in recent weeks have reported double-digit earnings declines. Pulte said third-quarter orders dropped 12% from a year earlier and 15% from the second quarter.

The company reported a third-quarter loss of $995.1 million, or $2.63 a share, compared with a loss of $361.4 million, or $1.15 a share, a year earlier.

Revenue fell 3.1% to $1.06 billion.

Gross margin on home sales fell to 7% from 12.6%. Closings dropped 7.2% to 3,865 units.

The company's home-building operations generated a pretax loss of $1 billion.

Goodwill impairment, construction and insurance reserves, and land-related charges totaled $986 million. Pulte reported a pretax loss of $292 million a year earlier, the WSJ reported.

Betting that the housing sector had hit bottom, Pulte last year acquired competitor Centex Corp. for $1.3 billion.

Pulte took a $655 million third-quarter charge, driven primarily by expectations for lower demand. Pulte has now written down $1.15 billion, or 83%, of the original $1.395 billion goodwill recorded, according to Credit Suisse.

"The charges were everywhere," wrote Stephen East, a building analyst with New York City-based Ticonderoga Securities.

"No one should be surprised by the goodwill write-off," says East. "Our only surprise was that all of it was not written off. However, we still think that could happen."

Pulte says the purchase was a good one. Even so, Pulte reduced its operating areas to four from six and consolidated divisions in Arizona, Florida and in the New York and New Jersey area. It also cut corporate staffing.

"These actions will result in a fourth-quarter charge," Dugas said. "But with many forecasting demand in 2011 will show only modest gains, we are acting proactively now to make sure we maximize the savings opportunity."

Pulte Scamming Customers of Their Deposits

2011-02-11T17:43:00.004-05:00

The New York Times
Melissa Calderone says Pulte Homes preapproved a mortgage but later backtracked on it.

http://www.nytimes.com/2011/02/06/business/06gret.html

By GRETCHEN MORGENSON
Published: February 5, 2011

MELISSA CALDERONE was ready for a fresh start when she made plans last year to move to Florida from New Jersey. Recently remarried, she signed a contract in mid-March on a house to be built in Windermere, Fla., by Pulte Homes, the nation’s largest homebuilder. The neighborhood had good schools for her three children and two stepchildren. It was also close to where Ms. Calderone’s parents lived.

Her local bank approved her for a mortgage. But then a Pulte Homes saleswoman told her that she would get a $4,000 credit toward closing costs if she took out a loan with the homebuilder’s banking unit instead. Ms. Calderone, 38, agreed. She deposited $20,000 in earnest money and set aside $80,000 more for a down payment on the $347,000 house. Her closing date, documents show, was scheduled for late summer, about six months later.

Then her troubles began. Although she had been “preapproved” by Pulte, the company ultimately denied her the loan. Then, contending that Ms. Calderone had defaulted on the purchase agreement by failing to close on time, Pulte kept her $20,000 deposit. The house went back on the market.

“They have my money and the house, which they are selling to somebody else,” Ms. Calderone said. “I have no house and no deposit.”

Asked about Ms. Calderone’s complaint, a spokeswoman for the PulteGroup declined to comment, citing concerns over customer privacy.

But the spokeswoman provided a general statement: “Preapproval does not guarantee the final approval or closing on the transaction, since a buyer’s financial situation can change during the homebuilding process or the buyer may be unable to verify certain aspects of his or her credit profile. If the buyer fails to close on his or her financing for any of these reasons, the purchase agreement allows the seller to retain the earnest money to offset any financial damages.”

But Ms. Calderone is not the only Pulte customer with this kind of complaint. Last year, the attorney general of Arizona filed a lawsuit against Pulte, contending that the company’s mortgage sales practices deceived consumers. That suit cited borrowers who thought, as Ms. Calderone did, that they had been approved for a mortgage when, in fact, they had not been. Those people lost their deposits as well.

“In the earlier contracts there was a 60-day period for refunds,” said Nancy M. Bonnell, the assistant attorney general for Arizona who litigated the matter against Pulte. “It seemed like the disapproval of the loans came after the 60-day period. Then consumers would find out they did not qualify for the loan or rate.”

Ms. Bonnell said that Pulte customers in her case forfeited deposits ranging from $2,500 to $25,000 each.

Even when a customer notified Pulte within the specified refund period, the company did not return deposits, according to the Arizona complaint. Some customers were told they had “prequalified” for a loan at one interest rate only to be charged a much higher rate when the loan came through, the complaint said. One customer was promised a 7 percent mortgage but received one carrying a rate of almost 14 percent, it said. Knowing she could not afford the loan, that customer canceled her purchase; Pulte refused to refund her deposit, the complaint said.

Pulte settled with the Arizona attorney general last August, without admitting or denying wrongdoing, Pulte agreed to pay $1.18 million, including restitution.

Under the terms of her contract with Pulte, Ms. Calderone had 45 days to cancel her purchase and get her deposit back. But as occurred in Arizona, her problems with Pulte Mortgage — indeed her first contact with the loan-processing unit — did not come until well after that period had ended.

E-mail correspondence between Ms. Calderone and Pulte shows that the lending company did not contact her until May 25, 2010 — some 67 days after she signed her contract. At that point, she began supplying documents, like the terms of her child-support agreement with her ex-husband, which was her only source of income.

Over the next three months, she continued to respond to questions and requests from Pulte, even when it asked for materials she had already submitted. Pulte also asked about small transactions in her bank account. Where did a $500 cash deposit come from, Pulte wondered? A wedding gift, Ms. Calderone replied.

AS the summer passed, Ms. Calderone kept supplying documents. But she was growing worried that she would be unable to move into the Windermere house by the Sept. 9 closing date. She was living with her parents, and a delay would mean her children could not attend the Windermere schools, where she had registered them.

During this back and forth, nothing changed in Ms. Calderone’s financial situation. At one point, the Pulte loan processor told Ms. Calderone that questions were arising because of new rules imposed by Fannie Mae and Freddie Mac, the mortgage finance giants. “Then she comes back to me saying ‘You haven’t been divorced for a year yet, so we can’t verify how much income you are getting every month,’ ” Ms. Calderone recalled.

It seemed to her like one big runaround. “I had the income; I had the credit score,” she said. “They preapproved me, and I had a closing date. To me, is seemed like they were looking for a reason not to complete the deal.”

The closing date came and went with no contact from Pulte, Ms. Calderone said. The extension she had received from the local school district, meanwhile, was set to expire on Sept. 23.

On Sept. 13, she received an e-mail from a Pulte representative saying the company was submitting her loan application to its regional underwriting manager for review. “I should know today,” the e-mail concluded.

But Ms. Calderone did not hear about her loan that day. About a week later, she received a phone call saying the loan had been denied. Unsure if her children would be able to stay in the local school, she canceled her contract and asked for her money back. She was told that because she had failed to live up to her end of the deal, Pulte would keep her $20,000.

In early December, after she wrote a letter complaining to Pulte’s chief executive, the company offered her a $10,000 credit on the purchase of another Pulte home. She declined. She and her family are now renting a home in south Florida.

A version of this article appeared in print on February 6, 2011, on page BU1 of the New York edition.

Home Prices To Decline In 2011

2010-12-28T18:31:00.001-05:00

http://www.visualtube.com/media/1950/Home_Prices_To_Decline_In_2011/

Home Prices Expected To Take Big Hit Next Year

2010-09-28T17:28:00.001-04:00

Click Here or Click On Title

Pulte Homes Illegal Alien Carpenters

2010-08-10T19:10:00.006-04:00

Click Here To View The Video

Once again great jobs Americans would kill for, in the hands of illegal aliens. This time working for a subcontractor of Pulte Homes, the nation's largest home builder. No social security, No workers' comp. And you be the judge about whether the managers know all about it, and either actively arrange it, or merely look the other way.

Help stop this madness by helping Stand With Arizona push for the enactment of mandatory E-Verify Plus with strong penalties for both workers and companies for social security fraud.

Let's help get Americans back to work!

Click Here To Donate to Stand With Arizona Today

Click Here To Stand With Arizona

Centex Homes-Pulte Homes Collapse In Texas

2010-01-27T22:14:00.005-05:00

Illegal Acts by Pulte @ Sun City Texas

2010-01-27T22:07:00.002-05:00

The residents of Sun City Texas need to demand the resignation of all of the Pulte appointed board of Directors, and especially Brent Baker, for violating the "Interested Director Rule" that is found in Texas Non-Profit law. This statute prohibits interested directors (those that have financial interests/stake - employees of Pulte - with issues before the board) from voting on issues before the board in which they have a financial stake/interest. This law is intended by the State to protect the interests of homeowners like us from having double agents on our board of directors.

This law requires that Interested Directors ABSTAIN from any votes before the board in which they have a financial interest. In the case of Pulte employees, this includes all three of them. They have not carried out their duty of loyalty to the CA when voting on issues that are financially deterimental to Pulte. They have not abstained from voting as is required by law. The CA attorney is also complicit in allowing this violation of state law to continue without taking action against the Interested Directors on the board.

All three of the Pulte directors should be required to resign their positions on the board for failing to abstain on votes concerning their employer - Pulte. The CA attorney also needs to resign or be terminated for failing to protect the interests of the CA and its members.

In the future any decision that the CA board of directors needs to consider that involves Pulte should be referred to an impartial committee (not made up of Pulte baised members) for an impartial recommendation. Any Pulte appointed board of directors on the board need to be required to abstain from voting on such issues.

Pulte and its three appointed board of directors, headed by Brent Baker, have been violating the law and basically - DOUBLE DEALING - when it comes to voting on CA issues that involve Pulte. Really, we have had an employee of Pulte negotiating with Pulte on behalf of the CA???? How unfair and unjust is that??

Please raise your voices in demanding the resignation of all three current Pulte employees that are now on the Board of Directors of the CA as well as the resignation of the CA attorney.

Ventnor Residents against the abuse of Eminent Domain, Pulte Pulls Out

2010-01-26T14:05:00.002-05:00

You ! Yes You ! Have helped us save our homes for the present. A very big thank you. Pulte Homes has pulled out of the deal and city officials are scurrying around like cock roaches. People can beat the unjust practice of taking peoples homes and giving it to developers to make millions.

http://cleaning-products.net/ventnor.htm

Abuses from Centex Homes - Pulte Homes

2010-01-02T19:55:00.000-05:00

Don't Buy a House Yet

2009-12-05T09:06:00.001-05:00

By Steven Goldberg, Contributing Columnist, Kiplinger.com
Dec 3rd, 2009

When housing prices hit bottom, they will languish near those low levels for years to come. So don’t be in a rush to buy.
Mortgage interest rates are at a 50-year low. Last month, Congress extended a tax credit for home buyers through April. The economy is beginning to crawl out of what by some measures is the deepest recession since the 1930s. One survey already shows house prices beginning to rise.

So isn't it time to buy a home? Kiplinger's certainly thinks so. But if I were in the market for a new home, I would wait. Housing prices typically don't rebound quickly after a bust; instead, they level out and stay near that low base line for years.

I don't see why this time should be different. True, prices seem as though they can't drop further, and in some areas they even show signs of an upturn. But if prices won't be taking off and might well resume their decline, you lose nothing but a little time by waiting to buy.

Of course, if you're buying out of necessity — because you're moving to a new area and need to sell your old house and buy a new one, for example -- there's no need to wait. But if you're planning to buy your first house, if you want to move to a larger home, or especially if you're buying a house for investment purposes, take your time.

The housing picture is complex — and frightening. House prices have plunged 30%, on average, from their 2006 peak. But from 2000 to 2006, average prices nearly doubled. That means average house prices are still almost 40% higher than they were a decade ago. Forty percent is a healthy increase — even in a robust economy.

And the economy, of course, is anything but robust. A fragile recovery seems to have begun last summer, but unemployment stands at 10.2% and is likely to rise even higher. It may not begin to fall substantially until late next year. Companies were quick to lay off workers, but they are being slow to hire.

As bad as the overall economy is, residential real estate is in much worse shape. About seven million households — or 12.5% of all homeowners — either are behind on their mortgages by 30 days or more or are in foreclosure. It's hard to make the house payment if you're unemployed. Millions of houses already stand empty — victims of the subprime loans that sparked the Great Recession. Almost a quarter of homeowners owe more on their mortgages than their houses are worth.

The history of busts.
Nationally, housing prices haven't declined from one calendar year to the next since accurate record keeping began in 1968. But in 2005, the Federal Deposit Insurance Corp. identified 21 regional housing busts since 1968. (The FDIC defined a bust as a decline of 15% over five years.)

Busts occurred in Texas when oil prices sank in the mid 1980s, in Southern California in the early 1990s amid defense-industry cutbacks, and in much of the Northeast corridor in the late 1980s and early 1990s. The 21 busts happened for varying reasons, and each unfolded differently. But they all shared one common trait: A nasty regional recession triggered each one.

Many (but not all) busts followed booms — just as our national housing crash followed an unprecedented boom.

Most (but not all) of the regional busts tended to be painfully protracted affairs. Why? Because unless you're forced out, most of us would rather stay in a house, pay the mortgage and hope for an eventual upturn rather than sell and realize our losses quickly. That means home prices don't go down all at once; they tend to slide agonizingly slowly on infrequent sales.

True, the tax credits and low mortgage rates make buying a house tempting today. But if you buy into a slumping housing market, those incentives won't add up to much. So while the worst of the real estate decline is surely behind us, the odds are strong that you'll be able to buy later at the same price — or a lower one.

Steven T. Goldberg is an investment adviser.

Hagens Berman Sobol Shapiro Investigating Pulte Homes in Arizona and Nevada

2009-10-28T22:27:00.003-04:00

PHOENIX--(BUSINESS WIRE)--Hagens Berman Sobol Shapiro announced today it is investigating Pulte Homes (NYSE: PHM) in Arizona and Nevada based on reports that claim the company may be engaged in a fraudulent scheme to artificially inflate home sale prices and drive sales by controlling the home sale process.

The firm filed a lawsuit against Pulte Homes in California last week, citing similar claims and believes the practice is widespread throughout Pulte neighborhoods in Arizona and Nevada.

The lawsuit in California claims Pulte placed unqualified homeowners in loans that they could not afford in an effort to sell more homes and at higher prices. Since Pulte controls the entire home buying process, its settlement and appraisal arms can take whatever steps necessary to close a sale at prices demanded by Pulte.

“We believe Pulte Homes spent a lot of time and effort to develop a sophisticated scheme in California, and decided they didn’t want to stop there,” said Rob Carey, a partner in the HBSS Phoenix office. “We believe that Pulte targeted homeowners in states with high foreclosure rates, including Arizona and Nevada, and we’re interested in learning more about the company’s sales process in these states on behalf of homeowners.”

HBSS is interested in hearing from anyone who purchased a home from Pulte in the past several years in Arizona or Nevada. Homeowners can contact the firm at pulte@hbsslaw.com, visit the Web site at www.hbsslaw.com/pulte or call (206) 623-7292.

Hagens Berman Sobol Shapiro will treat all information as confidential.

About Hagens Berman Sobol Shapiro

Hagens Berman Sobol Shapiro is a nationally recognized class-action and complex-litigation law firm based in Seattle with offices in San Francisco, Chicago, Boston, Los Angeles and Phoenix. Among recent successes, HBSS negotiated a $300 million settlement in the DRAM memory antitrust litigation, the largest antitrust settlement in U.S. history, recovered $340 million on behalf of Enron employees, and was part of the leadership team in the $3 billion Visa/MasterCard settlement. In pharmaceutical litigation, the firm’s recent successes include a $350 million settlement with McKesson, more than $200 million with other parties in drug-pricing litigation, and a $150 million settlement regarding Lupron. HBSS represented Washington and 12 other states against the tobacco industry that resulted in the largest settlement in history. For a complete listing of HBSS cases, visit www.hbsslaw.com.

Contacts:
Hagens Berman Sobol Shapiro
Rob Carey, 602-840-5900
Rob@hbsslaw.com
or
Firmani + Associates, Inc.
Mark Firmani, 206-443-9357
Mark@firmani.com

Pulte Homes Lawsuit

2009-10-27T14:14:00.002-04:00

A law firm filed a class-action lawsuit against Pulte Homes in California claiming the company artificially propped up home sale prices and pushed homeowners into dangerous loans for additional profits.

The suit claims that Pulte’s practices created ‘toxic subdivisions’ resulting in foreclosures, a steep decline in home values, a loss of buyer’s down payments, loss of mortgage payments and ruined credit.

The suit represents anyone who purchased a home in a Pulte neighborhood between Jan. 1, 2005 and March 1, 2007. If you fall into this category, please visit http://www.hbsslaw.com/pultehomes. You can share your story with attorneys and learn more about the lawsuit.

Pulte Downgraded To Junk

2009-08-27T16:37:00.001-04:00

DOW JONES NEWSWIRES

Moody's Investors Service lowered its credit ratings on Pulte Homes Inc. (PHM) one notch further into junk territory following the company's $1.4 billion purchase of Centex Inc.
The ratings agency expects the combined homebuilder's "currently robust cash flow will decline substantially this year and next" as the benefits of inventory liquidation play out.
Once that happens, Moody's said Pulte will need to generate increasing portions of its cash flow from operations. That will pose a "considerable challenge," citing the company's large land position, below-industry-average margins and somewhat-low revenue per employee compared with peers.
The downgrade closes Moody's review of the company's begun in April, after the deal was announced. At the time, Moody's said it was examining whether the new company's larger land portfolio would increase risks to debt holders.
The combined company has nearly 190,000 housing lots in 29 states, one of the largest land supplies in the industry and will be a major builder of homes for first-time home buyers and retirees. By units it will be the nation's largest builder.
Pulte was lowered by Moody's to B1, or four steps into junk territory. The ratings outlook is stable, with Moody's noting that increased risks from its large combined land position are offset by potential cost-savings benefits.
Standard & Poor's Ratings Service and Fitch Ratings last week affirmed their ratings on Pulte but have negative outlooks.
Shares were down 4.1% at $12.78 in recent trading.

Housing Outlook

2009-07-10T12:08:00.001-04:00

Foreclosure sales, short sales and first-time homebuyers taking advantage of tax credits is purely illusionary and hides the underlying problems of lending and inventory," says Anthony Sanders, a finance professor at George Mason University's Hall School of Management. "Plus, the jumbo and non-first-time market has to show volume."

The spring sales bump many had hoped for didn't materialize. According to the National Association of Realtors, pending sales activity only climbed 0.1% from April to May--not exactly a market rally.

There are too many sales in markets that are affordable to first-time buyers, driven by foreclosures and short sales, and too few sales in expensive parts of town thanks to a lack of financing and the impression that prices are coming down.

In neighborhoods rich and poor alike, it's going to be a long summer--with no sign of recovery on the horizon. "

and is right on with market trends and the abandonments found all over the country.

Now Comes The Real Crash

2009-06-05T10:31:00.002-04:00

June 5, 2009

Here's the good news: The worst of the subprime mortgage carnage is behind us.

Here's the bad news: That was just the tip of the iceberg. There's probably much worse ahead.

Fool retirement guru Robert Brokamp recently sat down with noted value investor Whitney Tilson to talk about his thoughts on the continuing mortgage crisis.

I thought this was a subprime problem!
It was, at first.

Many subprime mortgages started out with a low "teaser" interest rate that then increased to a market-level subprime rate after a set period of time. When that happened, the payments would go up -- often by a lot -- and the hapless overleveraged borrower would go, "Oh fiddlesticks, I can't afford to pay the mortgage anymore."

(Except that most of them probably didn't say "fiddlesticks." But I digress.)

Tilson notes that the number of loans facing payment shock started climbing in early 2006, reached a very high level in early 2007, and stayed high until about the end of last year, at which point they started falling off sharply. Likewise, the massive wave of defaults and foreclosures triggered by these higher payments is abating. That wave is behind us.

But subprime mortgages weren't the only ones with teaser rates.

Now, it's mostly not a "subprime" problem
The emerging problem is with prime mortgages, those issued to people with good credit. The crash in housing prices has left many of those folks "underwater" -- owing more than their house is now worth. And the crash in the global economy has left many of those folks unemployed -- and many who are still employed are making less money now than they were a year or two ago.

Tilson cites figures that about a quarter of all prime U.S. mortgages are underwater at the moment, and that number is likely to grow if housing prices continue to fall. Despite some beliefs that home prices are bottoming, unemployment is still a big problem -- Deere (NYSE: DE), among others, just announced new rounds of layoffs. And now mortgage interest rates are suddenly rising -- the average 30-year mortgage is up to 5.32% this week, up from 4.91% just last week, according to the most recent Freddie Mac (NYSE: FRE) survey.

Nobody knows quite how all these factors will play out, but clearly the potential for a huge wave of defaults in the near future is growing.

What, you thought things were stabilizing?
Tilson recently argued that the appearance of stabilization in the housing market is a "head fake," caused by the usual spring surge in homebuying and a temporary reduction in the inventory of foreclosed homes sitting on the market. The crisis, Tilson says, is actually getting worse.

As Tilson sees it, although the worst of the losses suffered by speculators and subprime borrowers are over, problems with prime loans are just now starting to pick up steam. Many conforming prime loans are owned by Fannie Mae (NYSE: FNM) and Freddie Mac. But other mortgages will likely also prove problematic, including home equity lines and prime "jumbo" mortgages, as well as the scarier Alt-A and Option ARM loans.

Eeeek?
Why scarier? According to Tilson, nearly half of Alt-As and over 70% of Option ARMs are underwater. Alt-A resets are just starting to take off -- they won't peak until 2012 or 2013. And Option ARMs don't just reset, they recast -- borrowers go from making just interest payments, in many cases, to making full proper 30-year-amortized mortgage payments. Some could see their monthly payments increase by 60% or more.

Results From Lowes Not Good For Homebuilders

2009-05-20T20:32:00.003-04:00

Lowes is doing very well because their customers are buying up Foreclosures and they need to fix up those homes with much needed items from Lowes. People are not buying new homes because the value is in Foreclosures. Homebuilders will struggle to keep their heads above water for a very long time to come.

Pulte Homes Is A Dead Business

2009-05-17T21:40:00.001-04:00

With unemployment up, deficit up, interest rate up, cost of basic needs like electricity & water up, even though 1st time buyers are supposed to get $8000 credit, nobody mentioned that you need to make less than $75,000/yr to get it; I find it hard to imagine that these homebuilders will survive this environment. No wonder they even knocked down some unfinished projects.

"U.S. unemployment rate in April hit 8.9%, its highest in a quarter century. The labor force lost 539,000 non-farm jobs in April, down from March's 699,000 decline. A 72,000 rise in government jobs, mainly new workers for the 2010 Census, helped narrow the gulf."
But if you dig in those numbers carefully, you need to add Birth Death Assumption and seasonal adjustment, Census one-timers (because those are one-timers, temporary workers), plus revisions, bringing the REAL Adjusted Non-Farm Payroll job losses to 847,000 not 539,000.
And this was supposed to be WORSE THAN EXPECTED.

It is very obvious that they are manipulating their data, accounting rules, people to pump up this market, all that with the goal of restoring confidence so that the general unaware investors would put money back in the market;
in the mean time, the companies can then take advantage of the hype to raise capital at a higher price. No wonder everybody wants to raise capital.
Even MSFT who has tons of cash already, comes out raising capital to take advantage of the stock price, not that they need the cash! This proves that stock prices are inflated, companies know this, the smart people know this, but the average investors don't. Because of greed, they don't want to miss the boat by not investing.
Once they are all in, the market will become overbought and it's the little guys who will end up holding the bag.

Homebuilders are losing money building homes

2009-05-12T18:02:00.002-04:00

Homebuilders are losing money building homes. Some even knock down unfinished projects.
Wait until interest rates go up more (already moved up the last 2 weeks), when government has no more money "because of their other projects", also housing prices will go down another 15%, then it will be a complete disaster for homebuilders. Papering up losses and bad news can only last a while before the real truth comes out.

New Home Prices Have to Go Up 10 to 15 % Before Builders Can Start Making Profits

2009-05-07T12:23:00.003-04:00

New Home Prices Have To Go Up 10 To 15% Before Builders Can Make A Profit. I don't foresee That Until 2 More Years. There Is Just To Much Builder Inventory & Foreclosures On The Market To Deal With Before You Can Start Increasing New Home Prices 10-15%. It May Take More Than 2 Years To Start Seeing A Decrease In Those Inventories & Foreclosures. My Question Is-How Much Longer Can These New Home Builders Survive? Even When They Start Making A Profit, It Will Be A Long Time Before They Can Start To Keep Their Heads Above Water, Literally. The Market Will Never Be The Same As It Was, Which In My opinion, Is A Good Thing For The Consumer.

Pulte Homes reported a net loss of $514.8 million for the 1st quarter of 2009

2009-05-06T11:54:00.001-04:00

BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--May. 5, 2009-- Pulte Homes (NYSE: PHM) announced today financial results for its first quarter ended March 31, 2009. For the quarter, the Company reported a net loss of $514.8 million, or $2.02 per share, compared with a $696.1 million net loss for the prior year first quarter, or $2.75 per share. The first quarter 2009 net loss included $410.2 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $663.6 million. Consolidated revenues for the quarter were $587.4 million, a decline of 59% from prior year quarter revenues of $1.4 billion.

Merging Pulte Homes with Centex possibly making for the largest housing disaster

2009-04-23T12:57:00.001-04:00

Just two months ago, Pulte Homes CEO Richard Dugas told analysts that not only did the homebuilder have too much inventory, but that it also had more land than it could possibly need, considering the housing industry's current malaise. Now he's gone out and bought Centex, which is going to end up giving him an estimated eight years’ worth of land. On top of that, the deal is going to give the combined companies so much debt that it will result in one of the worst cash-debt ratios in the industry.

Merging Pulte Homes with Centex may make for the nation's largest homebuilder, but it's also quite possibly making for the largest housing disaster.

Pulte & Centex?

2009-04-23T12:26:00.004-04:00

Why would Pulte buy Centex with 60,000 lots for $1.3 billion if the Foreclosure rates and the inventory levels are the highest it has ever been? Doesn't make much sense,homebuyers have plenty of foreclosures and builder inventory to choose from at a lower cost. Seems to me that management has their heads up their ass.

The highest foreclosure rates in the U.S. are all located in four states

2009-04-23T12:21:00.003-04:00

The 26 cities with the highest foreclosure rate in the nation are all located in four hard-hit states, with Las Vegas topping the list, according to a report released Wednesday.

Metro areas in California, Florida, Nevada and Arizona topped the foreclosure filing list for the first quarter of 2009 in a report from RealtyTrac, an online marketer of foreclosed properties. A foreclosure filing includes default papers, auction sale notices and repossessions.

Las Vegas had the highest rate of foreclosures of any city, with one in every 22 homes subject to a foreclosure filing in the first three months of the year. The rate of foreclosure filings was 4.5%, seven times the national average.

Merced, Calif., had the second highest rate, with Cape Coral-Fort Myers, Fla., Stockton, Calif., and Riverside-San Bernardino-Ontario, Calif., rounding out the top five.

"The metro areas with the highest levels of foreclosure activity in the first quarter of 2009 paint a picture of concentrated problems in a relatively small number of hard-hit areas," said James J. Saccacio, chief executive officer of RealtyTrac, in a written statement.

Foreclosure rates have been very high in the 4 key states throughout the bursting of the housing bubble, and so it was to be expected that cities from those states would pepper the top of the list.

However, it was a surprise to see the list so top heavy, according to Rick Sharga, senior vice president at RealtyTrac.

"The concentration of troubled metro areas within the hardest-hit states, candidly, was even more severe than we expected it to be," Sharga said. "The degree to which those four states dominated the rankings surprised even us."

New problem cities: Meanwhile, some metropolitan areas had a surge in foreclosures. Boise City-Nampa, Idaho, in 27th place, Provo-Orem, Utah, in 37th, and Charleston-North Charleston, S.C., in 51st were examples Sharga gave of areas that had particular strong gains in filings.

Sharga said the rise of foreclosures in additional regions indicates new factors influencing the housing market as the recession drags on.

"What we believe we are seeing is some of the areas with unemployment problems," said Sharga. "These are people living paycheck to paycheck and, when the paycheck is gone, suddenly they can't afford to make their mortgage payments."

The data for RealtyTrak's metro area foreclosure report is collected from 2,200 counties across the nation, and those counties represent more than 90% of the U.S. population. Some 203 areas are covered by the report.

Across the nation, foreclosure activity in the first quarter hit a record high, according to another RealtyTrac report issued last week. Total foreclosure filings reached 803,489 in the first three months of the year, the highest monthly and quarterly totals since RealtyTrac began reporting in January 2005.

The national report also found that the worst of the foreclosures were centralized in a handful of worst-hit states. California, Florida, Arizona, Nevada and Illinois accounted for nearly 60% of the total foreclosure activity in the first quarter, with 479,516 properties received foreclosure filings in those states.

US foreclosures up 24 percent in 1st quarter

2009-04-20T20:23:00.001-04:00

WASHINGTON (AP) -- The number of American households threatened with losing their homes grew 24 percent in the first three months of this year and is poised to rise further as major lenders restart foreclosures after a temporary break, according to data released Thursday.

The big unknown for the coming months, however, is President Barack Obama's plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans. The Obama administration expects its plans to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace it, despite $75 billion in incentive payments.

The faltering economy is causing the housing crisis to spread. Nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March, up from about 650,000 in the same time period a year earlier, according to RealtyTrac Inc., a foreclosure listing firm. During the quarter, Ohio was the state with the seventh highest number of homes seeing foreclosure activity with about 31,600 receiving at least one filing, up 1 percent from a year earlier.

In March, more than 340,000 properties were affected nationwide, up 17 percent from February and 46 percent from a year earlier. Ohio had 12,600 homes receiving foreclosure notices during the month, 12 percent more than during March 2008.

Foreclosures "came back with a vengeance" last month and are likely to keep rising, said Rick Sharga, RealtyTrac's senior vice president for marketing.

Nearly 191,000 properties completed the foreclosure process and were repossessed by banks in the quarter. While the number was down 13 percent from the fourth quarter of last year, it is expected to rise through the summer and then possibly taper off.

Fannie Mae and Freddie Mac, the big mortgage finance companies, together with many banks had temporarily halted foreclosures in advance of Obama's plan. Now armed with the details about which borrowers can qualify, the mortgage industry has begun foreclosing on ineligible borrowers.

The Treasury Department has signed contracts with six big loan servicing companies -- including Citgroup, Wells Fargo and JPMorgan Chase. Many have already started processing loans as part of the government's "Making Home Affordable" plan.

"We need to get the long-term solutions for these folks," Shaun Donovan, Obama's housing secretary, said in an interview.

In the coming months, Donovan said, there are still likely to be increased foreclosures, especially from vacant houses, second homes and those owned by speculators. None of those properties will qualify for a loan modification. However, he remained optimistic that overall foreclosures could start to decrease this summer.

But even industry executives who emphatically support the plan emphasize that it's success isn't guaranteed.

"The effectiveness of the plan overall obviously is going to depend on the level of industry participation," said Paul Koches, general counsel of Ocwen Financial, which collects loan payments on subprime loans.

Many borrowers and consumer groups claim the modifications offered by the lending industry don't do enough to help cash-strapped homeowners, despite more than a year of public prodding from regulators. Fewer than half of loan modifications made at the end of last year actually reduced borrowers' payments by more than 10 percent, data released last month show.

Plus, the lending industry has been swamped by the unprecedented wave of calls from distressed borrowers. "You can't wave a magic wand and make the loans suddenly modified," Sharga said. "They're all individual transactions."

In RealtyTrac's report, Nevada, Arizona, California and Florida had the nation's top foreclosure rates. In Nevada, one in every 27 homes received a foreclosure filing, while the number was one in every 54 in Arizona. Rounding out the top 10 were Illinois, Michigan, Georgia, Idaho, Utah and Oregon.

Homebuyers: Please Beware of Pulte Homes

2009-03-27T20:05:00.008-04:00

Pulte Homes, Inc. builds homes under the Pulte, Del Webb and DiVosta brands. Homebuyers: don’t settle for tales of “dream homes” you hear from Pulte salespeople or realtors working on commission. In 2008, Building Justice surveyed over 870 Pulte brand homeowners from three of the company’s biggest markets – California, Arizona and Nevada. Download our free report and hear directly from Pulte and Del Webb homeowners about how they feel about their homes and this company. Or, click here.

57% of homeowners surveyed reported that they filed a home warranty claim with Pulte or Del Webb. Read Here!

Defective Construction
Broken 2x4, attic framing. Ridgemont Heights tract. Adelanto, California. August 8, 2008.

Pulte salespeople will probably boast that it is one of J.D. Power & Associates’ highest ranking home builders in its “New-Home Builder Customer Satisfaction Study.” However, only 20 percent of the J.D. Power’s survey ranks builders on workmanship and materials. Don’t judge them on the basis of J.D. Power rankings. Construction quality is just one of five factors they consider. Listen to what actual Pulte and Del Webb homeowners have to say. Some homeowners paint a much less rosy picture of Pulte brand homes. As one Pulte homeowner from Buckeye, Arizona put it, “Between all the problems, the non-responsive customer service and the poor ‘fixes’, we are very saddened that our ‘dream home’ has become a nightmare.”

www.PoorlyBuiltbyPulte.info

Current and prospective owners of poorly built homes by Pulte need a place to go. To organize. To share information. To compare notes. To tell their stories. www.PoorlyBuiltbyPulte.info is that place.

I Sold 3,250 Shares of Pulte Home Stock

2009-03-15T13:49:00.002-04:00

03/12/2009 YOU SOLD
PHM PULTE HOMES INC FORMERLY PULTE CORP TO
Cash Shares: -3,250.000 Price: $10.00 Amount: $32,446.11
Comm: $53.70 Fees: $0.19
Settlement Date: 03/17/2009

Major Funds Dumping Pulte Stock

2009-02-21T07:56:00.002-05:00

Blackstone Group Lp
2009-02-17 Sold All shares -350,000

Lmm Llc Md
2009-02-17 Sold All shares -5,796,649

Traxis Partners Llc
2009-02-17 Sold All shares -483,680

Old Mutual Asset Managers Uk Ltd 2009-02-17 Sold All shares -372,800

Wellington Management Co Llp
2009-02-17 Sold All shares -148,694

Everest Capital Ltd
2009-02-17 Sold All shares -640,000

Algert Coldiron Investors Llc
2009-02-17 Sold All shares -47,165

Newbrook Capital Advisors Lp
2009-02-17 Sold All shares -272,759

Legg Mason Capital Management Inc 2009-02-17 Sold All -420,900

Capital International Inc
2009-02-13 Sold All -506,600

Systematic Financial Management Lp 2009-02-12 Sold All shares -1,463,606

Credit Suisse Institution
2009-02-17 Sold 37% of their PHM holdings down from 1,288,201 -472,631 to 815,390

Charles Schwab Investment Management Inc 2009-02-13 Sold 58% of their PHM holdings down from 1,098,051 -626,773 to 471,278

Not looking good for Pulte Homes.

Bankruptcy?

2009-02-20T09:21:00.002-05:00

NEW YORK, Feb 10 (Reuters) - A review of the 33 U.S. home builders generating more than $10 million in revenue found that more than 30 percent are in danger of filing for bankruptcy, according to a restructuring consultancy.

"It's striking when you see just how much cash flow has continued to decline for the better builders," said John Bittner, partner at Grant Thornton Corporate Advisory and Restructuring Services.

Already this year, several home builders have filed for bankruptcy, including Florida's Mercedes Homes Inc, which filed on Jan. 26, citing the collapse in demand for new homes and an oversupply of existing homes for sale. The company called itself the No. 20 home builder in the United States and their operations were spread throughout 13 markets.

Fulton Homes Corp also filed for Chapter 11 bankruptcy protection this year in Arizona, while Landmark Homes and Development Inc filed in Nevada.

To avoid the same fate, the survivors have, and continue to, cut costs and prices and ramp up incentives on inventory in order to increase cash flow at the expense of profitability.

Expense reduction will be critical, said Tim Skillman, a Grant Thornton principal.

Average revenue per home builder declined nearly 50 percent from peak levels to $1.9 million last year. Home builders that slash land spending and maximize cash flow will help themselves combat the specter of distress, the firm said.

But there is a limit to how much builders can cut costs and sell off assets, said Bittner.

"It'll get to a point when builders get rid of the assets with the most value and expenses can't be cut much further. After that, there's not much they can do except wait for a turnaround in the housing market."

Pulte chairman to sell 4.75M shares in homebuilder

2009-02-11T18:34:00.001-05:00

BLOOMFIELD HILLS, Mich. (AP) -- Pulte Homes Inc.'s chief executive intends to sell about 4.8 million shares, or 11 percent of his personal stake in the homebuilder, through a prepaid variable forward contract, according to a regulatory filing Monday.

The contract allows William J. Pulte, who also founded the company, to receive cash now, while also keeping the right to maintain ownership of the stock at the end of the contract's 16-month term by settling it with cash.

Pulte also may keep an interest in a possible increase in the shares' value over the next same period, the company said. In addition, the contract protects Pulte against the potential decline in value of the shares.

The executive will use some of the proceeds of the contract to settle a previous, prepaid variable forward contract he entered into a year ago, the company said. The new contract combines the roughly 3.4 million shares pledged in the February 2008 contract with 1.4 million new shares.

Pulte Homes currently has about 257.5 million shares outstanding.

Pulte's Last quarter result was horrendous

2009-02-09T19:52:00.002-05:00

Pulte's Last quarter result was horrendous if you look at it carefully. Their sales were very inflated.
PHM used to sell 40% or so of their existing backlog, and the rest coming from new orders. But in 2008 4th quarter, it was 89% and in the 3rd quarter, it was 63% from existing backlog.
They are now entirely selling out of existing backlog.
Therefore, sales numbers will have to go down considerably next quarter.

Pulte Homes Inc.'s (PHM) fourth-quarter net loss

2009-02-08T08:29:00.001-05:00

Pulte Homes Inc.'s (PHM) fourth-quarter net loss narrowed due to lower write-downs, but revenue and net new-home orders tumbled as the company said the housing market took "yet another step down."

"Sinking consumer confidence, excess foreclosure inventory and continued very tight mortgage availability put dramatic downward pressure on the homebuilding market," said President and Chief Executive Richard J. Dugas Jr.

The home builder reported a net loss of $338.2 million, or $1.33 a share, compared with a year-ago loss of $874.7 million, or $3.46 a share.

The latest results included $380 million of pretax impairments and other land-related charges, while year-ago results included $509 million in impairments.

Revenue tumbled 43% to $1.65 billion.

Analysts polled by Thomson Reuters projected a loss of 71 cents a share, including the impairments, on revenue of $1.44 billion. In October, the company declined to provide a fourth-quarter guidance, citing a high degree of volatility in the housing industry and overall economy. Net new-home orders in the quarter slumped 61% to 1,763 homes. Closings decreased 37% to 5,474 as the average sales price declined 13% to $278,000. The backlog as of Dec. 31 was valued at $631 million, or 2,174 homes, down from $2.5 billion, or 7,890 homes, a year earlier.

Sold 2,400 Shares of Pulte Homes Stock Today @ 12.70

2009-02-06T15:46:00.004-05:00

Well, today was a very good day! I sold 2,400 shares of Pulte Homes Stock today @ 12.70 for a profit of $15,000.

Stock Order: PHM-PULTE HOMES INC FORMERLY PULTE CORP
Status Filled at $12.70
Symbol PHM
Action Sell
Quantity 2,400 Shares
Route KNIGHT CAPITAL MARKETS, L.L.C.
Order Type Limit at $12.70
Time in Force Good 'til Canceled
Conditions None
Trade Type Cash
Market Session Standard
Order Date 02/06/2009, 02:24:48 PM
EXECUTIONS FOR THIS TRADE
Date Time Price Quantity Total
02/06/2009 02:30:34 PM $12.70 2,400.000 $30,479.82
NET TOTAL 2,400.000 $30,479.82

FBI Should Look At Pulte Home Loans

2008-09-24T17:09:00.004-04:00

September 24, 2008

I have contacted several agencies requesting they do a full investigation of Pulte Home practices in the state of New York, New Jersey, Pennsylvania, & Delaware.

Wall Street Bail Out

2008-09-23T20:25:00.002-04:00

Congress must not write the no-strings-attached blank check the Bush administration wants to bail out Wall Street with. The $700 billion (at minimum) for Wall Street and $0 for Main Street deal that gives the Treasury secretary absolute control of who gets cash is not the way to address the nation’s financial crisis.

There Is Little Light at The End of The Tunnel For Homebuilders

2008-09-19T10:38:00.005-04:00

The tunnel is very long and dark. Homes prices are coming down, but who needs a homebuilder, when there are plenty of great foreclosed homes on the market?

Here's the problems for Homebuilders:

1. Lending is so tight they make you squeeze lemons for lemonade, and you cant use your hands.

2. As you say, why would anyone buy a new home when there are so many foreclosure properties available at very reduced prices.

PHM will need to morph their business from being a run-of-the-mill cookie-cutter shop to being a "Custom Home Builder" in order to survive as a company. This perhaps extremely limits their market, but they might survive.

What Are Homebuilder Employee's Doing?

2008-09-17T10:59:00.001-04:00

What are 4000+ PULTE or Lennar employees doing every day? dusting?

Officials announce takeover of mortgage giants

2008-09-07T13:57:00.001-04:00

Sunday September 7, 12:34 pm ET
By Alan Zibel and Martin Crutsinger, AP Business Writers

Government assumes control over mortgage giants Fannie Mae and Freddie Mac

WASHINGTON (AP) -- The Bush administration, acting to avert the potential for major financial turmoil, announced Sunday that the federal government was taking control of mortgage giants Fannie Mae and Freddie Mac.

Officials announced that the executives and board of directors of both institutions had been replaced. Herb Allison, a former vice chairman of Merrill Lynch, was selected to head Fannie Mae, and David Moffett, a former vice chairman of US Bancorp, was picked to head Freddie Mac.

Treasury Secretary Henry Paulson says the historic actions were being taken because "Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe."

The huge potential liabilities facing each company, as a result of soaring mortgage defaults, could cost taxpayers tens of billions of dollars, but Paulson stressed that the financial impacts if the two companies had been allowed to fail would be far more serious.

"A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance," Paulson said.

Both companies were placed into a government conservatorship that will be run by the Federal Housing Finance Agency, the new agency created by Congress this summer to regulate Fannie and Freddie.

The Federal Reserve and other federal banking regulators said in a joint statement Sunday that "a limited number of smaller institutions" have significant holdings of common or preferred stock shares in Fannie and Freddie, and that regulators were "prepared to work with these institutions to develop capital-restoration plans."

The two companies had nearly $36 billion in preferred shares outstanding as of June 30, according to filings with the Securities and Exchange Commission.

Paulson said that it would be up to Congress and the next president to figure out the two companies' ultimate structure.

"There is a consensus today ... that they cannot continue in their current form," he said.

Paulson and James Lockhart, director of the Federal Housing Finance Agency, stressed that their actions were designed to strengthen the role of the two mortgage giants in supporting the nation's housing market. Both companies do that by buying mortgage loans from banks and packaging those loans into securities that they either hold or sell to U.S. and foreign investors.

The companies own or guarantee about $5 trillion in home loans, about half the nation's total.

Lockhart said that both Fannie and Freddie would be allowed to increase the size of their holdings of mortgage-backed securities to bolster the housing industry as it undergoes its worst downturn in decades.

Lockhart said in order to conserve about $2 billion in capital the dividend payments on both common and preferred stock would be eliminated. He said that all lobbying activities of both companies would stop immediately. Both companies over the years made extensive efforts to lobby members of Congress in an effort to keep the benefits they enjoyed as government-sponsored enterprises.

Both Paulson and Lockhart were careful not to blame Daniel Mudd, the CEO of Fannie Mae, or Freddie Mac CEO Richard Syron for the companies' current problems. While both men are being removed as the top executives, they have been asked to remain for an unspecified period to help with the transition.

Full Uninterrupted Speech of Gov. Sarah Palin At The RNC

2008-09-05T12:21:00.001-04:00

http://www.visualtube.com/view_video.php?viewkey=f4c4db0902a8a395ced9

PHM Stock = Obvious Manipulation

2008-09-03T21:37:00.003-04:00

September 3, 2008

Dow is down over 170 points - Lower Income & Home Builders are up....Well not all, just the ones being manipulated "PHM"....HEDGE FUNDS.

Large Homebuilder May Be Near Bankruptcy

2008-09-01T18:31:00.002-04:00

September 1, 2008

Woodside Homes, which bills itself as the third largest private homebuilder in the U.S., may be nearing bankruptcy.

The Utah-based company is part of a group of builders developing the Inspirada master-planned community outside Las Vegas. Other developers at the community include Toll Brothers TOL, KB Home KBH, Meritage Homes MTH and Beazer Homes BZH.

The Inspirada project is being built on 2,000 acres in Henderson, Nev., that Woodside and the various joint venture partners purchased at auction from the Bureau of Land Management. The project was originally dubbed South Edge.

Earlier this year, another partner in the project, private builder Kimball Hill Homes, filed for bankruptcy.

Last week, a group of note holders filed an involuntary petition against Woodside Homes in U.S. Bankruptcy Court in the Central District of California. Involuntary petitions are often made by creditors to force a company into Chapter 11 bankruptcy. Woodside has 20 days from the date of the Aug. 20 filing to respond.

“First and foremost, Woodside continues to operate in the normal course of business — paying employees, vendors and subcontractors, and building and selling homes,” Jennifer Mercer, a spokesperson for Woodside Homes, told TheStreet.com.

“The company is working with both the note holder and bank groups and will be presenting its position to the judge requesting an orderly resolution on Wednesday,” Mercer said. She refuted the Tuesday report from Standard & Poor’s LCD News that said Woodside had already filed for Chapter 11.

The petitioning creditors listed on the filing against Woodside are John Hancock Life Insurance, AXA Equitable Life Insurance, Metropolitan Life Insurance, New York Life Insurance and Security Life of Denver Insurance. The total claim amount is $156 million.

Pulte Homes In Trouble Again

2008-08-24T20:52:00.004-04:00

The Clearman Law Firm Announces Patent Infringement, Fraud Lawsuit Against Nation's Largest Homebuilders and Home Products Manufacturers.

Pulte, Lennar, David Weekley Homes, Honeywell, Whirlpool, others named as defendants.

MARSHALL, Texas, August 21, 2008 /PRNewswire/-- Attorneys from Houston's The Clearman Law Firm are announcing a federal lawsuit filed late yesterday on behalf of the owner of HomeBuilderShowroom.com against a group of nationally recognized homebuilders and home products manufacturers. The 72-page petition alleges the defendants committed trade secret theft, fraud, patent infringement and violated antitrust laws and confidentiality agreements in order to build a competing Web-based business.

According to the lawsuit filed in the U.S. District Court for the Eastern District of Texas in Marshall, the owners of HomeBuilderShowroom.com invented the "Builder's On-Line Assistant" in 1999. The revolutionary service was created as a means of using the Internet to connect homebuilders, manufacturers and homebuyers. The company's design allowed builders to offer standards and upgrades for homes as well as the opportunity for homebuyers to make their purchasing decisions online using virtual showrooms.

The owner of HomeBuilderShowroom.com -- OLA, LLC, a privately held company based in Chicago -- applied to patent the processes associated with "Builder's On-Line Assistant" in January 2000, and received two related patents in 2006 and 2007.

The lawsuit alleges that, prior to securing the patents, OLA reached confidentiality agreements with several of the defendants before providing a demonstration of "Builder's On-Line Assistant." Relying on the confidentiality agreements, the petition continues, OLA revealed details about its methods and service after receiving positive responses from several homebuilders and manufacturers.

However, according to the complaint, the defendants declined to purchase the service offered by OLA, and instead formed a new company that began marketing a nearly identical service in 2005 called "Envision."

The Austin, Texas-based company formed by the homebuilders and home products manufacturers -- Builder Homesite Inc. -- claims on its Web site that the "Envision" service has increased homebuilders' profits by $2,000 to $5,000 per home on more than 150,000 homes thus far. The same language is included on the Web site for New Home Technologies Inc., a Builder Homesite subsidiary.

Attorney Scott Clearman, lead counsel for OLA and founder of The Clearman Law Firm, says his client took every precaution to protect its valuable idea only to see it replicated in violation of the company's patents and agreements.

"The defendants obviously saw the benefit in OLA's idea, but they apparently didn't think they needed the company's permission to use its patents or to honor their confidentiality agreements," Mr. Clearman says. "It's hard for me to believe that these huge companies didn't know what they were doing when they basically copied our client's process verbatim and collaborated to market it themselves."

In addition to Mr. Clearman, OLA also is represented by Brian D. Walsh of The Clearman Law Firm and Matthew J.M. Prebeg, Edward W. Goldstein and Holly H. Barnes of Houston's Goldstein, Faucett & Prebeg.

Notable homebuilders named as defendants in the lawsuit include Atlanta-based Beazer Homes USA, Inc. (NYSE: BZH - News), Newport Beach, Calif.-based Capital Pacific Holdings, Inc., Dallas-based Centex Real Estate Corp., Houston-based Weekley Homes, L.P. d/b/a David Weekley Homes, Los Angeles-based KB Home (NYSE: KBH - News), Miami-based Lennar Corporation (NYSE: LEN - News), Bloomfield Hills, Mich.-based Pulte Homes, Inc. (NYSE: PHM - News), Irvine, Calif.-based Standard Pacific Corp. (NYSE: SPF - News) and Horsham, Penn.-based Toll Brothers, Inc. (NYSE: TOL - News).

Also named as defendants are home products manufacturers Atlanta-based Georgia-Pacific Corporation, Lakeville, Minn.-based Hearth & Home Technologies, Inc., Morristown, N.J.-based Honeywell International Inc. (NYSE: HON - News), Kohler, Wisc.-based Kohler Co., Taylor, Mich.-based Masco Corporation (NYSE: MAS - News), Lewisville, Texas-based Overhead Door Corporation, Toledo, Ohio-based Owens Corning (NYSE: OC - News), Greenville, S.C.-based Progress Lighting Inc., Palatine, Ill.-based Square D Company, Maumee, Ohio-based Therma-Tru Corp., Federal Way, Wash.-based Weyerhaeuser Company (NYSE: WY - News), Benton Harbor, Mich.-based Whirlpool Corporation (NYSE: WHR - News) and York, Penn.-based York International Corporation.

A copy of the lawsuit and more information about The Clearman Law Firm is available at http://www.clearmanlaw.com.

For more information or to schedule an interview with Mr. Clearman, please contact Bruce Vincent at 800-559-4534 or bruce@androvett.com.

Hey Pulte Homes! "The Problem Is Demand"

2008-08-23T10:00:00.002-04:00

Pulte Homes: "The Problem Is Demand"; No, the Problem is Pulte Homes

We heard from Toll's Bob Toll on bended knee looking for Congress to stimulate housing demand, and Pulte Homes joined in. Nothing really new there - the homebuilders are asking Congress for a $15,000 tax credit similar to the $2,000 tax credit offered to kickstart housing 35 years ago during the Ford Administration (they'll likely get half of that amount) - however, there were some interesting comments related to pricing that are worth sharing.

Richard Dugas, PHM CEO, said he believes it is a mistake to believe the new housing market can correct without the resale market also correcting. This is an important point of distinction. New homes are now selling at a 10% to 15% discount to resale in most areas of the country. Historically, that ratio has been reversed.

"We clearly need resale pricing to correct, and correct dramatically,' Dugas said. He cited the most recent data from the S&P/Case-Shiller index showing a 14% decline in prices year-over-year, by far the largest on record, but noted that even that kind of decline is not enough.

"We view that [price decline] as a good thing," Dugas said, "and frankly we think resale pricing needs to continue to move down, because existing buyers are telling us they would like to buy our homes, but need to sell their existing homes, but they've obviously got
to get realistic about price before they have a chance to sell those homes."

This view - that prices still need to come down significantly - makes some sense, especially if your business is selling new homes, but there are other issues at work. Foremost is the problem facing both Fannie Mae (FNM) and Freddie Mac (FRE) if Dugas gets his wish for dramatically lower home prices. We believe both companies are underestimating coming price declines.

Fannie recently relaxed downpayment rules so borrowers approved by Fannie Mae's automated underwriting program will now be able to borrow up to 97% of the value of their homes. At the current pace of decline using the Case-Shiller composite, it would take just four months to be underwater on your mortgage with a 3% down payment.

Meanwhile, the real issue facing homebuilders is the psychological impact of housing price deflation. "Of [the issues facing housing], I think by far the biggest issue is buyer confidence and the lack of the ability for the buyer to make a decision to get in housing, because they are fearful of price declines," Dugas said. That's why he's looking to Congress to help. "The whole idea here folks would be to put a floor under pricing and get people back in the market," Dugas said.

If Dugas and Toll get their way, we taxpayers will essentially become home price guarantors as existing homeowners are forced to reprice their homes downward while only they (the homebuilders) get to share in the profits. The rationalization for this disjointed and incongruous view of risk and reward is that housing is a "key linchpin" of the U.S. economy. Well, so was the cotton industry in 1790. Some things need to change.

Housing At All Time Low and Still Declining

2008-08-21T08:56:00.003-04:00

The end of the real estate recession seems nowhere in sight, in light of a slew of bleak news Tuesday of falling sales and prices, a severe decline in construction and deep losses and layoffs at one of the nation's largest builders.

Sales of existing homes fell last month to their lowest point in five years, the National Association of Realtors says. The NAR says it expects more dismal figures for September as the housing market reels from the crisis in the mortgage industry.

But the September figures might be much worse. Re/Max International, which analyzed existing-home sales in five major cities for USA TODAY, says September totals so far are down sharply from last year. In Baltimore, Tucson and Seattle, for example, sales in the first three weeks this month are off more than 40%.

"I've given up forecasting how low housing sales will go," says Joel Naroff, president of Naroff Economic Advisors.

And Stuart Miller, CEO of Lennar, (LEN) has given up forecasting the builder's profits after reporting a record loss of $514 million in its third fiscal quarter, as it laid off 35% of its employees and wrote down the value of real estate.

Lennar warned that more pink slips are on the way. The company began construction on 60% fewer homes in the June-through-August period compared with the same fiscal quarter last year. At the same time, nearly one-third of buyers canceled their contracts.

"August seemed to be a melting pot of all things negative," Miller says. The declines were felt in every region of the country, he says.

FBI Probes Unusual Incentives for Home Buyers

2008-08-17T19:45:00.001-04:00

The Wall Street Journal

Investigators Ask
Whether Payments
Misled Lenders
By NICK TIMIRAOS

When home sales began to slow at the start of the downturn, home builders offered buyers incentives -- instead of reducing prices -- to stimulate demand. The incentives included cars, tuition and credit-card payments, and even cash.

A sign is posted in front of a bank-owned home that is for sale in Richmond, Calif.
Now, federal investigators are questioning whether some of those incentives misled lenders and caused them to write mortgages that were artificially inflated, contributing to today's home-price crash.

Using incentives to sell homes has long been a marketing tool for builders. When properly disclosed and structured, the practice is legal. But the Federal Bureau of Investigation is looking into allegations that home builders, brokers and appraisers defrauded lenders by not disclosing unusually large incentives to buyers, which could have added as much as $100,000 to the price of a home.

Housing analysts say incentive schemes prolonged the housing boom in hot markets like Las Vegas and, consequently, have made the downturn all the more severe.

The FBI wouldn't name individuals or companies under scrutiny, but confirmed that it is looking at cases where the disclosures of incentives "haven't made it all the way to the ultimate lender," says William Stern, financial crimes supervisor for the FBI in Palm Beach County, Fla., and the bureau's former national mortgage-fraud coordinator.

Interviews with real-estate agents, home buyers and former employees at home builders describe an industry where competitive pressures fueled unusually creative giveaways in a last-ditch attempt to prevent price cuts. Home builders hate to cut prices, not only because it reduces profit, but also because their customers who paid full price complain.

In the Las Vegas division of Dallas-based Centex Corp., the home builder paid off car loans, credit-card bills and mortgage payments on existing homes to entice new buyers on homes priced between $350,000 and $550,000. Those payments weren't always disclosed to lenders.

"You weren't buying a house. You were buying a package," says Dana Ellis, who worked as an escrow manager for Centex from 2004 to 2006. To qualify, Centex required the buyer to use the company's in-house mortgage unit to originate the loan, and the loan application included an incentive "addendum" that listed the incentives but wasn't always sent to the lender. "They weren't disclosing any of this. That was on separate paper that was pulled," she says.

Centex says that the program was confined to about 50 sales and was shut down in June 2006, about six months after it began. Centex averaged 63 home sales a month for the year beginning April 2006. "These incentives did not reflect standard corporate practice and, once discovered, the practice was immediately halted," Centex spokesman David Webster says. Centex says only one of the loans was government-backed, through the Veterans Administration home-loan program, and the builder has promised to stand behind all of those loans.

Elsewhere, developers offered "sweat equity," or payments for buyers to receive home improvements such as landscaping. "You're basically getting banks to give you a cash advance," says Chip Hickman, the general manager of Easy Street Realty in Las Vegas. He said such programs weren't heavily advertised and were offered by many area builders, although he declined to name them. "It was more sales agents in the model home saying, 'Look, tell me what you need and I got a lot of money to play with.' "

There aren't any strict limits on incentives, but they could run afoul of federal regulations if they cause the mortgage to increase by more than the cost of the incentive. "It's a phantom incentive to mask it in an excessive loan," says Brian Sullivan, a Department of Housing and Urban Development spokesman.

Stronger due diligence by banks might have caught some of these problems. Banks, however, say they relied on professional appraisal companies to insure property pricing. Mortgage-fraud experts say appraisers sometimes cooperated with builders because it was the only way to get business. Appraisers say that determining the value of new homes is more difficult because comparable sales figures are provided by builders.

In some cases, developers gave outsized commissions to real-estate agents who then gave that money back to the buyer. The average commission on a home sale nationally was 5.2% last year, up from 5% in 2005, according to a survey by Real Trends, an industry newsletter.

At the height of the real-estate boom, commissions in Las Vegas regularly reached double digits, real-estate agents say. Kurt DeWinter, a Henderson, Nev., agent, received a $70,000 commission on a $550,000 home from Beazer Homes USA Inc. two years ago. He says he gave half of that to the buyer.

"They didn't care what you did with the money as long as the buyer paid the price they wanted for the house," says Mr. DeWinter, who personally went into foreclosure in that same neighborhood on a $500,000 Beazer home. He says he received a $50,000 incentive from the builder, which he used for his down payment. Beazer didn't return calls seeking comment.

Some builders continue to make generous offers. Wagner Homes Inc., a local home builder, advertises in big capital letters at the top of a flyer "$130,000 commission any way you like it!" for homes in developments like "Dawn Day Fusion," a northwest Las Vegas subdivision that offers homes with Asian-inspired architectural flourishes. New homes listed there in mid-July for $530,000 even though similar model homes in that development sold for $400,000 two years ago.

"A fee that high has got to raise a bunch of flags," says Kenneth LoBene, HUD's Las Vegas field director, because builders typically reduce the price of the home rather than offer such large incentives and because homes in that subdivision have sold for as little as $240,000 in foreclosure auctions. Representatives of Wagner Homes didn't return calls seeking comment. Steve Hawks, a Las Vegas real-estate agent, points to offers like this as one that a commercial lender wouldn't back if properly disclosed. "You find me an institutional investor that's going to buy this loan," he says.

Housing Slump's Third Year to Be "Deepest" Since WWII

2008-08-03T08:32:00.006-04:00

As the U.S. housing slump enters its third year, there
is no sign of dawn in the darkness that is paralyzing home building, home buying and home lending. Standard & Poor's 15-member Supercomposite Homebuilding Index tumbled 62 percent this year as of yesterday, the largest drop since the benchmark was started in 1995. The companies have lost about $35 billion of market value.

The outlook is bleak with new home sales projected to fall 13 percent, according to estimates from the National Association of Realtors in Chicago, even as interest rates drop. Losses at Fannie Mae and Freddie Mac, the two biggest U.S. providers of mortgage financing, may restrict the availability of home loans, and chief executive officers at D.R. Horton Inc. and Centex Corp. expect another tough year. This looks like it's going to be the deepest correction of any housing correction since World War II, and the question really is, What's the duration, how long will it be?

Centex CEO Timothy Eller said at a JPMorgan Chase & Co. conference in
Las Vegas, the decline in the S&P homebuilding index has pushed the measure to March 2003 levels, with companies including Centex and Pulte Homes Inc. falling more than 65 percent in composite trading on the New York Stock Exchange. Credit Protection Costs Total new home sales peaked in July 2005 and have declined for 19 of the last 28 months, according to Commerce Department data. Existing home sales peaked in September 2005. The median price for a new home dropped 13 percent in October, the most since 1970, and the annual sales rate for new homes in September was the lowest in almost 12 years.

Bond investors have sought more protection against homebuilders defaulting on debt as revenue and cash flow have declined. Credit protection costs reached 12-month highs for Miami-based Lennar Corp., Bloomfield Hills, Michigan based Pulte, Dallas-based Centex and Fort Worth, Texas-based D.R. Horton, the four largest U.S. builders by revenue; as well as Calabasas, California-based Ryland Group Inc., a builder in 28 U.S. markets, and Hovnanian Enterprises Inc. of Red Bank, New Jersey, the biggest builder in that state.

"Bankruptcy Risks"

Credit default swap spreads climbed by as much as 335 basis points for
builders with investment-grade ratings and by an average 209 basis points for
those with junk ratings, according to CreditSights Inc., a New York-based research firm. Credit default swaps are contracts to protect bondholders against default. An increase indicates worsening perceptions for credit quality. If we talked two weeks ago, I'd say there wasn't much more downside, but the market is acting like there's still a lot more to go,'' said James Wilson, an analyst who follows home builders at San Francisco-based JMP Securities LLC.

Beazer Homes USA Inc, the Atlanta-based homebuilder under investigation
by the U.S. Securities and Exchange Commission, and Hovnanian are "bankruptcy risks," Wilson said. Those companies have too much debt and are exposed to slumping housing markets in Florida and Michigan, Indiana and Ohio, he said. Beazer CEO Ian McCarthy said at the conference in Las Vegas that it is going to be another tough year. The company has a secured credit line of $500 million, he said. The company is really looking to make sure its balance sheet and its credit position is strong as we go through this tough time, McCarthy said. The company also has agreements with our bankers and with our secured credit lenders that will put us in good stead going forward.

Worse 2008-2009?

Hovnanian CEO Ara Hovnanian said at the JPMorgan conference that
the company has a better financial structure than we've ever had. Hovnanian's bonds don't start coming due until 2010 and 2012, giving us plenty of breathing room, he said. We're experienced operators, been around for almost 50 years, Hovnanian said. We will clearly persevere and thrive in the eventual upturn as we have after every cycle. Many homebuilding executives at the conference said they expect the slump to last through 2008. Next year is going to be worse than for us and for the industry in general, said Donald Tomnitz, D.R. Horton's CEO.

At least three closely held companies filed for bankruptcy protection in the past month, including Fort Lauderdale, Florida-based Levitt and Sons LLC, the 1949 pioneer of planned suburbs with Levittown on New York's Long Island. Tousa Inc. of Hollywood, Florida, which has lost 99 percent of its stock market value this year, said this month it was considering filing for Chapter 11 bankruptcy protection.

"Tousa's Strategy"

Tousa acquired 22,000 home sites in Florida through a joint venture in
August 2005, when the housing market was close to its peak. Florida accounted for five of the top 25 U.S. metropolitan areas with the highest foreclosure rates this year, according to RealtyTrac Inc. The Irvine, California-based seller of foreclosure data has a database of more than 1 million U.S. properties. The New York Stock Exchange suspended trading in Tousa because the average closing price was less than $1 for 30 straight trading days. Tousa last traded at 8 cents, down from a seven-year high of $30 in August 2005.

Standard Pacific Corp., based in Irvine, California, is the worst performer in the S&P homebuilding index, dropping 89 percent. Home sales in California,
the company's largest source of revenue, fell 40 percent and median prices for existing homes slid 9.9 percent, data compiled by the California Association of Realtors show. Housing Glut A housing rebound is unlikely, as about 1 million adjustable loans made to subprime borrowers, those with weak or incomplete credit histories, are scheduled to reset at a higher rate in 2009, according to RealtyTrac. That may put many homeowners at risk of foreclosure and lower the value of neighboring houses, said Rick Sharga, vice president of marketing at RealtyTrac. About 1.3 million subprime mortgages will be in foreclosure by September 2009, including actions already under way, according to estimates from New York- based analysts at Credit Suisse Group.

There is just no quick fix, including further rate cuts, to stabilize the current weakness in the housing market, said CreditSights analysts Frank Lee and Sarah Rowin in a report to clients. Discounted Prices Builders must contend with a glut of existing homes on the market. There's an almost 11-month supply of unsold existing homes, the highest in more than eight years, according to data from the National Association of Realtors. The decline in the market for existing homes is lagging "far behind" the new home market, and resale prices have only started to erode, said Citigroup Inc. analyst Stephen Kim in a report.

We have never before seen how a belated dropoff in existing home prices will
affect already discounted prices for new homes, but it is difficult to be optimistic here, Kim wrote.

Citigroup cut its rating on Lennar, Centex, Los Angeles- based KB Home,
D.R. Horton, Ryland, Pulte and Standard Pacific to ``hold'' from ``buy.'' Meritage Homes Corp. in Scottsdale, Arizona, was reduced to sell from hold. Cash flow will assume even greater importance as homebuilders owe $875 million in debt payments in 2008 and then about $1.6 billion in 2009 and 2010, data compiled by CreditSights show.

"Hard Year"

Potential legal costs also may hurt the builders, said Lee of CreditSights. D.R. Horton, Hovnanian and Reston, Virginia- based NVR Inc. are being sued by consumers who saidthey were coerced into taking loans from the company's mortgage units. The top 10 builders made $2.1 billion from providing financial services such as mortgages and title insurance last year, according to data compiled by UBS AG. Investigations of builders may also weigh on the companies.

The U.S. Department of Housing and Urban Development is examining whether builders received kickbacks when selling property. Pulte and KB Home are among six homebuilders that agreed to pay a total of $1.4 million to settle federal probes into whether they accepted rebates from insurers for referrals when selling homes.

New York, Ohio and at least six other states are investigating the
mortgage industry, including whether appraisers, mortgage brokers and lenders may have inflated home values. Resolving the complaints "could run into the millions or billions of dollars," CreditSights's Lee said. There will be some bankruptcies, some consolidations, some private equity plays, said Kenneth Rosen, chairman of the University of California's Fisher School of Real Estate and Urban Economics in Berkeley. It's going to be another hard year.

Why Pulte Homes Are Crap

2008-08-01T17:54:00.002-04:00

"And why no one should buy one"

From a dissatisfied Pulte Homeowner...

My house is only 7 months old. i have 3 full bathrooms. the 3rd bathroom is only used when guests stay over, and to date no guests have stayed over, as such the bathroom is never used. yesterday i was placing some items in the sink cabinet and noticed that the veneer was pulling back away from the floor of the cabinet, a whole big section of it. no signs of water or anything (a leak may have explained it). then i noticed the face frame of the cabinet on the lower right where the right side rail mates with the bottom rail, it separated and now has 1/2" gap between the pieces and i can see the dowels used to join the two.

further inspection of the exterior stucco revealed a few places where i can stick my pinky finger through to the foam insulation underneath.

the patio screen door seemed to have warped. how i don't know because its under a covered patio out cove. warped so much it no longer closes into the slider frame and it cannot be locked.

did i mention the shit iDrive garage door opener. after breaking 5 times i had Wayne Dalton install a standard belt driven overhead. so far no problems.

i have a massive flooding issue in the front of this home when it rains (we have monsoons, so that means lots of water all at once). idiots poured this slab below street grade so when it rains water flows towards the front door and garage!

the refrigerator and AC condenser unit was damaged during install.

PHM homes are cheap and way overpriced. most of the homes around me for sale shed 100K from their sale price 1yr ago. current prices are about what these crap homes should sell for. need i say more?

Bad News for Housing Stocks, Good News for Homeowners?

2008-07-29T21:11:00.002-04:00

It seemed like a great idea at the time. Sign folk's up to mortgages and sell the mortgages to another financial player who then bundles the mortgage with thousands of others and sells various risk based slices.

It failed in three different ways - two of which we know about, but one which is just emerging.

Firstly, the original mortgages were offered to people that couldn’t afford to pay them back, particularly when the so called “fixed” interest rates rose after an initial one or two year period. Much has been written about this (NINJA, Subprime etc)

Secondly, the riskier slices of the mortgages were vastly under priced, and so the interest rate premium didn’t begin to compensate for the very real probability of a high rate of failure to service the loans.

The third one is a doozy. It turns out that because of the mortgages being sold and sliced and sold, the ownership of the original mortgage is often in doubt. It took Mamie Ruth Palmer in Atlanta, Georgia to bust this one open, in a court case that has just ended a six year saga.

Her bank tried to foreclose on her, but couldn’t prove that they actually owned the mortgage. The bank ended up in the humiliating situation of losing on pretty much all fronts.

Stocks slide as financials again pull back

2008-07-28T16:40:00.002-04:00

July 28, 2008

NEW YORK - Wall Street again surrendered to investors' anxiety about the financial sector Monday, sending the Dow Jones industrials down 240 points and back into bear market territory. The flight from equities sent investors into safe-haven bets like Treasury bonds.

Financials that had rallied in recent weeks after logging huge declines, suffered from the same worries about souring debt that caused an abrupt end to their run-up late last week. Wall Street is concerned that a further withering of the housing and credit markets will damage bank balance sheets.

An International Monetary Fund report added to some of the stress in the market. The IMF predicted continuing problems in the credit and housing market that will continue to hurt the financial industry. It said, "at the moment a bottom for the housing market is not visible."

Frederic Dickson, chief market strategist at D.A. Davidson & Co., said investors are still trying to get a longer-term view on the stability of the banking industry, particularly the regional banks.

"Corporate depositors and individual depositors are looking at balances at individual financial institutions. I think that's unsettling some of the banks."

On Friday, federal officials closed branches of the 1st National Bank of Nevada and First Heritage Bank N.A. — owned by Scottsdale, Ariz.-based First National Bank Holding Co., adding to investors' jitters about the ability of some banks to stay afloat.

According to preliminary calculations, the Dow Jones industrial average fell 239.61, or 2.11 percent, to 11,131.08.

Broader stock indicators also fell. The Standard & Poor's 500 index declined 23.39, or 1.86 percent, to 1,234.37, and the Nasdaq composite index fell 46.31, or 2.00 percent, to 2,264.22.

Bond prices jumped as investors again sought the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.02 percent from 4.10 percent from late Friday.

The dollar was mixed against other major currencies, while gold prices fell.

Monday's pall over the market wasn't solely because of flagging confidence in the financial sector. Investors are also waiting to see whether oil prices' sharp drop of recent weeks has come to an end, or is just pausing. Light, sweet crude rose $2.23 to settle at $123.26 on the New York Mercantile Exchange.

The troubles that banks are having with bad debt underscore the difficulty that consumers are facing not only in keeping on top of their mortgages but to make their credit card and car payments. That is leading to worries about the broader economy. Investors should get some insight with big economic reports due at the end of this week.

On Thursday, investors will be looking for the first report on gross domestic product for the second quarter. Economists polled by Thomson Financial/IFR expect the Commerce Department to report that gross domestic product rose thanks in part to the government's tax rebate checks.

Then, on Friday, Wall Street will be awaiting the employment report for June. Often such reports are regarded as the most important economic readings of the month because of the insight into the well-being of the consumer. Their health is important because consumers account for more than two-thirds of U.S. economic activity. The latest Labor Department report is expected to show the seventh month of jobs losses and that the unemployment rate ticked higher.

Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams, said investors were selling off financial shares because of their continued concerns about housing.

"They're taking the financials to the woodshed," he said. "Until the housing market stabilizes you're really not going to see the financials stabilize."

Among financials, Citigroup Inc. fell $1.42, or 7.5 percent, to $17.43, while Morgan Stanley declined $1.79, or 4.9 percent, to $34.96.

The other corporate news Monday wasn't enough to support the market. Verizon Communications Inc. said its second-quarter profit rose 12 percent, although revenue came in short of Wall Street's forecasts. The company, one of the 30 that comprise the Dow industrials, made some investors uneasy after customers disconnected their landlines faster than before. Verizon fell 85 cents, or 2.5 percent, to $33.60.

Kraft, the maker of Velveeta, Oreo cookies and Maxwell House coffee, said higher prices helped offset rising commodity costs and listed second-quarter earnings nearly 4 percent. The company rose $1.45, or 4.9 percent, to $30.83 after raising its forecast for the year.

Private equity firm Kohlberg Kravis Roberts & Co. said Sunday it plans to go public on the New York Stock Exchange through a takeover of its Amsterdam-listed affiliate investment fund KKR Private Equity Investors LP.

Tyson Foods Inc., the world's largest meat company, fell $1.14, or 7 percent, to $15.09 after reporting a 90 percent drop in its fiscal third-quarter profits because of rising cost of grain used to feed chicken.

Amgen Inc. surged $6.56, or 12.2 percent, to $60.48 after the company reported positive trial results for its osteoporosis drug candidate denosumab. Late-stage clinical trial results showed denosumab reduced the incidence of fractured vertebrae in post-menopausal women. It tacked on another 2 percent in after-hours trading after it reported second-quarter profit surpassed projections.

Declining issues outnumbered advancers by more than 3 to 1 on the New York Stock Exchange, where volume came to 1.17 billion shares.

The Russell 2000 index of smaller companies fell 14.23, or 2.00 percent, to 696.11.

Overseas, Japan's Nikkei stock average rose 0.14 percent. Britain's FTSE 100 fell 0.75 percent, Germany's DAX index fell 1.33 percent, and France's CAC-40 declined 1.20 percent

New Single Family Home Sales Fell By 0.6 Percent

2008-07-28T10:10:00.001-04:00

The Commerce Department said the pace of new single-family home sales fell by 0.6 percent from May to June. Sales are now 33 percent below a year ago, while prices are off 2 percent.

"I'm surprised only that it's declined more in June over May," said Tim Eller, chief executive Centex Corp. in Dallas. "The markets are continuing to deteriorate and I think that's an illustration of that fact."

The company is expected to report a quarterly loss of $1.10 a share on Tuesday, according analysts surveyed by Thomson Financial. Earlier this week, Pulte Homes Inc. also reported a loss for its second quarter.

Wall Street Tumbles, Led By Financials

2008-07-24T18:26:00.002-04:00

July 24, 2008

NEW YORK (Reuters) - Stocks tumbled more than 2 percent on Thursday after a report showing yet another drop in U.S. home sales prompted investors to take profits in financial shares, which had rallied over the past week.

The Dow fell the most in a month, as the rising price of oil compounded worries about the economy. The jump in crude spurred unease that the recent sharp declines may have run their course. Shares of companies particularly vulnerable to higher fuel costs, such as airlines and retailers, sank.

Financial companies, which have been incurring huge losses from the housing slump, slid after the data from the National Association of Realtors showed June sales of existing homes hit a 10-year low. An index of bank stocks (.BKX) fell 6.7 percent -- after rising about 40 percent over the past week.

Trading has been very volatile in recent weeks and the market has been on tenterhooks, given a flood of serious setbacks stretching from a high-profile bank failure to the cobbling together of a last-minute rescue plan of the two pillars of the U.S. housing market-- Fannie Mae (FNM.N) and Freddie Mac (FRE.N). The plan was passed by the House on Wednesday night, and is expected to be approved by the Senate on Saturday.

"The bailout plan restored enough confidence in the sector to take some pressure off the stocks, but the pretty nice bounce we saw seems to have run its course," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

"When people take another look at the underlying economics, they see that the overhang in housing has gotten a bit worse."

The Dow Jones industrial average (.DJI) fell 283.10 points, or 2.43 percent, to close at 11,349.28. The Standard & Poor's 500 Index (.SPX) slid 29.65 points, or 2.31 percent, to 1,252.54, while the Nasdaq Composite Index (.IXIC) shed 45.77 points, or 1.97 percent, to 2,280.11.

Shares of mortgage finance companies Fannie Mae (FNM.N) and Freddie Mac (FRE.N) fell more than 18 percent, just a day after the House approved the housing rescue package that would include a U.S. government lifeline for the two companies.

Fannie Mae's stock lost nearly 20 percent to $12.02, while

Freddie Mac's stock was down 18.4 percent at $8.81.

Other financial shares also fell. Citigroup (C.N) shed 9.8 percent to $19.06 and Goldman Sachs Group (GS.N) fell 4.1 percent to $180.26.

Bill Gross, chief investment officer of PIMCO, said the U.S. housing market faces $1 trillion in losses. The manager of the world's biggest bond fund said in his investment letter the best way to help the ailing U.S. housing market recover would be to cut the cost of mortgages via the U.S. housing bill and rescue package for the mortgage finance companies.

Home builder Ryland Group's (RYL.N) shares fell 19.1 percent to $21.43 after reporting a wider-than-expected loss late on Wednesday. The Dow Jones home construction index (.DJUSHB) fell 12.5 percent.

Ford (F.N) shares fell 15.3 percent to $5.11 on the New York Stock Exchange after the automaker posted a wider-than-expected loss on declining sales of pickup trucks and sport utility vehicles (SUVs) in North America.

Dow Chemical said its profit missed Wall Street's expectations as it grappled with higher energy prices. Its stock fell 3.3 percent to $33.11 on the NYSE.

Adding to the negative tone were brokerage downgrades on three Dow components.

U.S. aircraft company and defense contractor Boeing's shares fell 6.3 percent to $62.53 after Citigroup and Sanford Bernstein cut their price targets on Boeing, while Cowen & Co slashed its rating on the stock. Shares of AT&T, the largest U.S. telecommunications company, dropped 4.1 percent to $31.70 after JPMorgan cut its rating to "neutral" from "overweight." McDonald's stock dropped 2.2 percent to $58.37 after Deutsche Bank downgraded the world's largest fast-food chain's stock, according to theflyonthewall.com, a financial Web site.

Apart from the housing data, another economic report on Thursday showed a larger-than-expected rise in the number of Americans filing for jobless benefits in the latest week, adding to concerns about a slowing labor market.

U.S. oil futures rose $1.05 to settle at $125.49 a barrel after a drop of more than 5 percent over the previous two sessions. Earlier during Thursday's NYMEX session, oil hit an intraday high above $126.

An index of retail stocks (.RLX) fell 2.3 percent, while an index of airline stocks (.XAL) plunged 11.1 percent.

Apple Inc (AAPL.O), the maker of the iPod and iPhone, led the Nasdaq's major decliners, falling 4.4 percent to $159.03.

Trading was moderate on the New York Stock Exchange, with about 1.64 billion shares changing hands, below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 2.55 billion shares traded, above last year's daily average of 2.17 billion.

Declining stocks outnumbered advancing ones by 4 to 1 on the NYSE and by 2 to 1 on the Nasdaq.

U.S. home builders risk bankruptcy in 2008, experts say

2008-07-23T19:33:00.002-04:00

WASHINGTON: The collapse of the subprime mortgage market may push some big U.S. home builders toward Chapter 11 bankruptcy protection, according to bankruptcy advisers and lawyers who specialize in the real estate industry.

The weakest publicly held builders are staying out of bankruptcy by relying on the profit they made when sales boomed, and on the public debt they sold in those years, said Ronald Greenspan, a lawyer and financial adviser to the creditors of four bankrupt subprime mortgage lenders. Home builders issued $3.6 billion in public debt in 2005 and 2006, though only $600 million of that comes due this year, he said.

"There is no sword over the industry's head yet," Greenspan said Saturday at a conference of the American Bankruptcy Institute in Washington. "That doesn't mean the industry is not wounded. Instead, the breaking point could come in late 2008 or 2009."

The real estate market has been powered in recent years by subprime homebuyers, who typically have shaky credit histories. Now that such loans are no longer being made, demand for new homes will plunge, pushed down even further by the more than one million homes now in foreclosure, Greenspan said. At least 30 home lenders have halted operations or sought buyers in the past 12 months, including 5 that went bankrupt since November.

None of the major, publicly traded home builders have declared bankruptcy, though there are signs that many are in financial trouble, Greenspan said, declining to name specific companies. The value of shareholder equity for some companies equals or exceeds the value of the undeveloped land that the companies have under contract, Greenspan said. As the housing downturn continues, that land will fall in value.

The perceived risk of owning the bonds of some of the biggest U.S. home builders has risen since a wave of bankruptcies hit the mortgage industry that caters to homebuyers with poor credit histories. Credit default swaps have more than doubled in price since Feb. 1 for two of the four biggest builders, D.R. Horton and Pulte Homes, and for Toll Brothers, the big luxury-home builder.

Credit default swaps are financial instruments based on bonds and loans that are used to speculate on a borrower's ability to repay debt, and were created to shield bondholders from default.

Kara Homes, a New Jersey builder, was one of the first major, closely held home builders to file for Chapter 11 bankruptcy protection, in October. Such regional builders are likely to precede any of the big public companies into insolvency, said Kara's bankruptcy lawyer, David Bruck.

By 2008 or 2009, some of the larger companies will have to restructure as the housing crunch continues, he said, adding, "It's only a matter of time."

Pulte Homes Reports Second Quarter 2008 Financial Results-Another Record Loss

2008-07-23T18:57:00.004-04:00

July 23, 2008

Pulte Homes (NYSE: PHM) announced today financial results for its second quarter ended June 30, 2008. For the quarter, the Company reported a net loss of $158.4 million, or $0.63 per share, compared with a $507.6 million net loss for the prior year second quarter, or $2.01 per share. The second quarter 2008 net loss included $220.1 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $749.4 million. The second quarter 2008 also included a tax benefit of $56.8 million, primarily due to an adjustment in the Company's deferred income tax assets. Consolidated revenues for the quarter were $1.6 billion, a decline of 20% from prior year revenues of $2 billion.

"The operating environment for homebuilding continued to deteriorate during the second quarter of 2008," said Richard J. Dugas, Jr., President and CEO of Pulte Homes. "The downward trend in home prices persisted, and the softness in overall buyer demand remained a challenge for the industry, leading to unsold inventory for both new and existing homes still well above historical levels. Buyer confidence remains under pressure, both from the weakness in housing as well as concerns about the overall economy.

Second Quarter Results

Revenues from homebuilding settlements in the second quarter decreased 18% to $1.6 billion compared with $1.9 billion in last year's second quarter. The change in revenue for the quarter reflects an 8% decrease in closings to 5,438 homes, and an 11% decrease in average selling price to $286,000.

Second quarter homebuilding pre-tax loss was $221.3 million, compared with an $803.2 million pre-tax loss for the prior year quarter. The pre-tax loss for the 2008 second quarter reflects a decline in gross margins primarily related to the impact of impairments recorded in connection with our land inventory. Homebuilding SG&A expense decreased $118 million, or 40%, compared with the prior year quarter. During the second quarter of 2008, the Company recorded $220.1 million of impairments and land-related charges, including $153.6 million related to land impairments, $20.1 million associated with the write-off of land deposits and pre-acquisition costs, $44.7 million of impairments of land held for sale and $1.7 million related to the Company's investment in unconsolidated joint ventures. For the prior year quarter, these impairments and land-related charges totaled $749.4 million.

Net new home orders for the second quarter were 5,133 homes, valued at $1.4 billion, which represent declines of 32% and 42%, respectively, from prior year second quarter results. Pulte Homes' ending backlog as of June 30, 2008 was valued at $2.4 billion (8,254 homes), compared with a value of $5.2 billion (14,928 homes) at the end of last year's second quarter. At the end of the second quarter 2008, the Company's debt-to-capitalization ratio was 48%, and on a net debt-to-capitalization basis was 39%.

Six Month Results

For the six months ended June 30, 2008, Pulte Homes' net loss was $854.6 million, or $3.37 per share, compared with a $593.2 million, or $2.35 per share, net loss for the prior year period. Consolidated revenues for the period were $3.1 billion, down 21% from $3.9 billion for the first six months of last year.

Revenues from homebuilding settlements for the period were $3 billion, down 20% from the prior year. Lower revenues for the period resulted from an 11% decrease in average selling price to $290,000, combined with a 10% decrease in the number of homes closed to 10,171.

Homebuilding pre-tax loss for the period was $926.5 million, compared with a $951.6 million pre-tax loss for the prior year period. The pre-tax loss for the period reflects a decline in gross margins primarily related to the impact of impairments recorded in connection with our land inventory. Homebuilding SG&A expense decreased $197.3 million, or 34%, compared with the prior year period. During the first six months of 2008, the Company recorded $883.7 million of impairments and land-related charges, including $752.3 million related to land impairments, $20.4 million associated with the write-off of land deposits and pre-acquisition costs, $109.3 million of impairments of land held for sale, and $1.7 million related to the Company's investment in unconsolidated joint ventures. For the prior year period, these impairments and land-related charges totaled $881.5 million.

Third Quarter 2008 Guidance

"For the third quarter of 2008 we are providing guidance in the range from a net loss of $0.15 per share to breakeven from continuing operations, exclusive of a tax benefit and any additional impairments or land-related charges," said Dugas. "As part of its ongoing balance sheet focus, after reducing its outstanding senior debt by $313 million in the current quarter, Pulte targets a cash position by the end of 2008 of $1.7 billion to $1.9 billion."

A conference call discussing Pulte Homes' second quarter results will be held Thursday, July 24, 2008 at 8:30 a.m. Eastern Time, and web cast live via Pulte.com. Interested investors can access the call via the Company's home page at www.pulte.com.

Certain statements in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic and business conditions; (2) interest rate changes and the availability of mortgage financing; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) the availability and cost of insurance covering risks associated with the Company's business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives and/or local building moratoria; (10) governmental regulation, including the interpretation of tax, labor and environmental laws; (11) changes in consumer confidence and preferences; (12) required accounting changes; (13) terrorist acts and other acts of war; and (14) other factors over which the Company has little or no control. See the Company's Annual Report on Form 10-K and Annual Report to Shareholders for the year ended December 31, 2007 and other public filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to Pulte's business. Pulte undertakes no duty to update any forward-looking statement whether as a result of new information, future events or changes in Pulte's expectations.

I ended up making over $7,000.00 shorting PHM today

2008-07-17T17:39:00.003-04:00

Well I ended up making over $7,000.00 today shorting PHM because when I sold the shares this morning it jumped to $11.45 a share, so it was a very good day!

Order Status
Sell 3,800 Shares of PHM
Order Number:********* Details Filled at $11.45

Stock Order: PHM-PULTE HOMES INC FORMERLY PULTE CORP TO 05/17/2001
Status Filled at $11.45
Symbol PHM
Description PULTE HOMES INC FORMERLY PULTE CORP TO 05/17/2001
Action Sell
Quantity 3,800 Shares
Route *************************
Order Type Market
Time in Force Day
Conditions None
Trade Type Cash
Market Session Standard
Order Date 07/16/2008, 08:18 PM
Cancel Date
Order Number ********
EXECUTIONS FOR THIS TRADE
Date Time Price Quantity Total
07/17/2008 9:30 AM $11.45 3,800.000 $43,509.75
NET TOTAL 3,800.000 $43,509.75

I made $6,004.00 Today On Pulte's Stock

2008-07-16T20:22:00.002-04:00

Here is the profit I made today on Pulte Stock

PULTE HOMES INC FORMERLY PULTE CORP TO 05/17/2001

07/16/08

3,800.000 $10.700 $40,660.00 **$6,004.00** 17.32% $37,702.48 $2,957.52 7.84%

Total: $41,745.38

Profit: $6,004.00

Former Pulte Area VP Lynn Galindo Based In Las Vegas Nev. Received $300,000 In Compensation After Being Laid Off

2008-07-14T16:23:00.004-04:00

After negotiating with Pulte Homes, she signed a severance agreement July 20, 2007 under which Pulte paid her nearly $300,000 in severance pay, bonuses and other compensation. The agreement, included in court documents, contained clauses prohibiting Galindo from keeping any documents or disclosing proprietary information.

Stolen Trade Secrets?: Lawsuit Claims Exec Took $1M Study From Pulte Homes

2008-07-07T19:38:00.002-04:00

July 7, 2008 (Albuquerque Journal - McClatchy-Tribune Information Services via COMTEX)

PHM | news | PowerRating | PR Charts -- Hollywood's cloak-and-dagger world of industrial espionage and purloined trade secrets isn't typically associated with housing developments.

But Pulte Homes claims in a federal lawsuit that a top executive who was being laid off stole a highly confidential, $1 million Albuquerque market study and used it to create a similar report for a major competitor.

The lawsuit filed in U.S. District Court alleges that Lynn Galindo, a former area vice president based in Las Vegas, Nev., conspired with former subordinates and other employees to obtain the Albuquerque Operating Strategic Plan as she was negotiating her severance from Pulte.

Pulte claims Galindo entered into an agreement with Forest City Covington, developer of the 13,000-acre Mesa del Sol development south of the Albuquerque International Sunport, to provide that firm with a marketing study and used material from Pulte's report to do so.

There is no allegation of wrongdoing against Forest City, which is identified in the lawsuit but not named as a defendant.

"We would never contract with anyone with the specific aim of obtaining trade secrets," said Forest City Covington spokeswoman Anne Monson.

"That's just not what we're about."

An attorney for Galindo says the lawsuit is retaliation for Galindo's participation, as a witness, in a Nevada sexual harassment case against Pulte.

"This is a lawsuit where Pulte is going to have a great deal of egg on their face," said Marty Esquivel, an attorney for Albuquerque's Narvaez Law Firm, which is representing Galindo.

According to court documents, Galindo was served notice of her termination June 1, 2007, as part of a larger reduction of force by Michigan-based Pulte.

After negotiating with the company, she signed a severance agreement July 20, under which Pulte paid her nearly $300,000 in severance pay, bonuses and other compensation. The agreement, included in court documents, contained clauses prohibiting Galindo from keeping any documents or disclosing proprietary information.

The suit alleges that Galindo asked a colleague or colleagues, named as "Does 1 through X" in the suit, to provide her with a copy of the report during the period when she was negotiating the severance package.

The document contained information about the Albuquerque residential housing market, such as economic forces, population size and mobility and price sensitivity, and cost in excess of $1 million to produce, according to the lawsuit.

"The information is of great value to Pulte because it contains, in specific detail, the supply and demand characteristics of the entire Albuquerque market by Targeted Consumer Group, as well as detailed (and mapped) information about how the market breaks into component pieces ( submarkets), the perceptions of those submarkets among specific consumer groups and the desirability of the submarkets," the lawsuit alleges.

"Galindo, having served in a high level position at Pulte, knew or should have known that Pulte would not have executed the Severance Agreement had Pulte known that she was planning to, or in the process of, violating the Business Policy Agreement by obtaining and using its Confidential, Proprietary and Trade Secret Information," the lawsuit said.

Lynn Hynds, a Detroit-based attorney, told the Journal that Pulte discovered the alleged plot by reading e-mail communications by Galindo.

The Albuquerque market study is "the road map of (Pulte's) assessment of the market, today and into the future," he said. "It contains some of the most confidential information that can be known to a homebuilder."

But Esquivel said Pulte never saw the report Galindo prepared for Forest City -- for which the lawsuit says she was paid $250 an hour.

"They have no idea what was in that report," he said. "They're just making assumptions, and they're wrong."

He said Pulte was retaliating against Galindo because she is a witness in a case against Pulte brought by other employees in Nevada.

The plaintiffs in that case, he said, allege that they caught male Pulte executives referring to female colleagues as "bitches."

Pulte & Lennar Sell Land For 10 Cents On The Dollar

2008-07-07T09:31:00.002-04:00

Centex, Pulte dump land in Rancho - Sacramento Business Journal:: "At the height of the local housing boom, $8 million would have fetched less than 20 acres of land approved for new homes as prices had escalated to $600,000 an acre in some areas. Builders and developers are still waiting for a new benchmark on what land is worth in today's economy. The buyers in this deal, Alvarado and Somers, paid $32,000 an acre."

The weird thing about this story is that - Centex, at least - had already begun building, had models up, even had some homes completed and, apparently, sold. And then - poof - Centex's web site doesn't show anything in Rancho Cordova anymore. So what happens to the fine folks who bought new homes in the midst of the graded fields of mud that Centex no longer plans to build upon?

Centex and Pulte, as partners together, paid $50 Million, plus they spent another $30 Million in improvements - and then sold the land for $8 Million. I'll be very curious to see who survives - the Centexes or the Lennars? Centex recognized the downturn and the falling prices ahead, and they cut prices before anyone else - so they sold out before anyone else. Lennar is still dreaming of 2005 prices. Is it smarter to cut the losses and run, or to squeeze the last no-money-down, gotta-have-granite, easy financing nickel out of what history will surely remember as a crazy, self-indulgent market.

Lennar Corp. Speaks

2008-06-26T17:30:00.002-04:00

All builders are in the same boat, however some builders like Lennar seem to come out and just say it like it is. The Pulte Homes people at corporate, the construction office, or in a field sales office always try to bamboozle a prospective buyer by saying nah, Pulte is ok, it's just rough waters, we will survive, the market here is strong. It's a bunch of bullshit!!

Then when the shareholders get to see the numbers every quarter everyone seems shocked, how could this be? Pulte kept saying that everything was ok. It's refreshing to see builders like Lennar come out publicly and tell it like it is, that the forecast is very bad. Lennar Corp. said it's second quarter loss shrunk on lower expenses, but the revenue declined 60 percent as deliveries and new orders fell. The Miami based homebuilder also said it expects further deterioration in market conditions through the end of 2008.

More than 400 real estate industry players have been indicted since March — including dozens over the last two days.

2008-06-19T20:58:00.004-04:00

By Greg Bowden

June 19, 2008

I suspect PHM's mortgage company will be pulled into this as the FBI investigates down deeper into the mortgage scams that were going on. Just more trouble ahead for PHM (and others).

WASHINGTON - More than 400 real estate industry players have been indicted since March — including dozens over the last two days — in a Justice Department crackdown on incidents of mortgage fraud nationwide that have contributed to the country's housing crisis.

The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion.

"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind to millions of Americans," Deputy Attorney General Mark Filip said in a statement Thursday. The Justice Department and FBI planed to announce the cases at an afternoon news conference in Washington.

Since March 1, 406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.

In a separate sweep, two former Bear Stearns managers in New York were indicted Thursday, becoming the first executives to face criminal charges related to the collapse of the subprime mortgage market.

Across the country, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed and defaults and foreclosures soared.

Banks reported nearly 53,000 cases of suspected mortgage fraud last year, up from more than 37,000 a year earlier and about 10 times the level of reports in 2001 and 2002, according to the Treasury Department's Financial Crimes Enforcement Network.

The most common type of mortgage fraud was misstatement of income or assets, followed by forged documents, inflated appraisals and misrepresentation of a buyer's intent to occupy a property as a primary residence.

Over the last several months, the FBI has been investigating an estimated 1,300 mortgage fraud cases — including 19 involving subprime lending practices by U.S. financial institutions.

The Justice Department also is expected to ask Congress for more money to help combat mortgage fraud as part of a larger funding request to curb white collar crime and violent crime.

Pulte Homes to pay penalties for alleged Clean Water Act violations

2008-06-11T19:45:00.002-04:00

Four of the nation's largest home builders, including Michigan-based Pulte Homes, have agreed to pay civil penalties totaling $4.3 million to resolve alleged violations of the Clean Water Act, the Justice Department and U.S. Environmental Protection Agency announced June 11.

In addition to Pulte, the home builders are Los Angeles-based KB Home, Denver-based Richmond American Homes and Dallas-based Centex Homes. The four separate settlements resolve alleged violations of storm water run-off regulations at construction sites in 34 states and the District of Columbia.

Centex will pay a penalty of $1,485,000, KB Home will pay $1,185,000, Pulte will pay $877,000 and Richmond will pay $795,000.

The companies also have agreed to implement compliance programs that put controls in place to keep 1.2 billion pounds of sediment out of U.S. waterways each year.

Along with the federal government, seven states that were co-plaintiffs will receive a portion of the penalties based on the number of sites in each state. Those states are Colorado, Maryland, Virginia, Missouri, Nevada, Tennessee and Utah.

The Clean Water Act requires that construction sites have controls to prevent pollution from being discharged with storm water into nearby waterways.

The government complaints allege a pattern of violations including failing to obtain required permits or not obtaining permits until after construction had begun. At the sites that did have permits, violations included failure to minimize the discharge of pollutants, such as silt and debris, in storm water runoff.

The settlements require the companies to develop better pollution prevention plans for each site, increase site inspections and correct problems that are found. The companies must properly train construction managers and contractors, and are required to have trained staff at each construction site. They also must implement a management and internal reporting system to improve oversight of on-the-ground operations and submit annual reports to EPA.

The settlements are the latest in a series of enforcement actions to address storm water violations from construction sites around the country.

Robert Toll of Toll Brothers

2008-06-10T18:33:00.001-04:00

This sums it up.

PHM Book value is zero,it is an open ended stock company.LEH lesson.CFC lesson.

Robert Toll, CEO was just on CNBC saying materials and fuel will put homebuiders out of business.

Executive's at Pulte Homes may even do some prison time just like bankers and builders in the 80's.

2008-06-04T20:49:00.004-04:00

Pulte Homes has to say there are no more write downs to keep bankers on the hook.

Pulte Homes write downs will continue.

Pulte Homes Predatory sales and lending, they may even come up on Federal Charges. Pulte Homes are already up on state charges, in many states for misleading lending, misleading fees being rolled into loans.

Making misleading loans through FDIC banks is a Federal Crime. Executive's at Pulte Homes may even do some prison time just like bankers and builders in the 80's.

Hillary Clinton

2008-06-04T19:12:00.003-04:00

June 4, 2008

Dear Greg,

Over the course of this campaign, I have seen the promise of America in your courage and character, your energy and ingenuity, and your compassion and faith.

Your spirit has inspired me every day in this race. While I traveled this country talking about how I wanted to help you -- time and again, you reached out to help me. To grab my hand or grip my arm, to look me in my eyes and tell me, don’t quit, keep fighting, stay in this race for us. There were days when I had strength enough for the both of us -- and on the days I didn't, I leaned on you.

This has always been your campaign, and tonight, there's no one I want to hear from more than you. I hope you're as proud as I am of what we've done and that you'll take a moment to share your thoughts with me now at my website.

I want to congratulate Senator Obama and his supporters on the extraordinary race that they have run. Senator Obama has inspired so many Americans to care about politics and empowered so many more to get involved, and our party and our democracy are stronger and more vibrant as a result.

Whatever path I travel next, I promise I will keep faith with you and everyone I have met across this good and great country. There is no possible way to thank you enough for everything you have done throughout this primary season, and you will always be in my heart.

Sincerely,

Hillary Rodham Clinton

J. D. Powers #1 builder!!

2008-05-21T21:53:00.002-04:00

I remember an airline that had the J D Powers #1 rating on the day it filed for bankruptcy. Does anybody else remember TWA??? If PHM avoids BK, it will only be by a huge capital raise that will dilute the common to virtually nothing. Can you say Thornburg Mortgagee (TMA)? Longs, I recommend strongly that you take advantage of this little upside flurry of the last few months and salvage what you can of your money. Preferably you should go short. It's an easy trade. Short it and stop loss your position just about $15 in case I'm wrong. PHM's gonna crash....

Pulte critics, unions rally at meeting-Click Here

2008-05-21T21:45:00.002-04:00

A group of protesters pierced the usually peaceful Birmingham morning air with chants attacking Pulte Homes on Thursday.

The rally, staged by the AFL-CIO group and unions including sheet metal workers and painters, was timed to greet Pulte Homes Inc.'s board of directors as they assembled at the Community House for their annual shareholders meeting.

Chants of "Pulte Homes is falling down," got curious looks from passing motorists, but the protest did not interfere with the meeting.

http://www.blogger.com/post-create.g?blogID=5674379140540164174

The FBI and SEC investigating on PHM price pumping

2008-05-16T17:45:00.003-04:00

The FBI & the SEC has started an investigation on Pulte Homes stock price pumping.

No Assets? No Problem

2008-05-05T10:30:00.001-04:00

You probably thought nothing-down mortgage loans disappeared in the wake of the American subprime lending crisis, which has ensarled much of the world in a credit crunch.

They didn't. Even more surprising, many Americans can still buy homes with nothing down thanks in large part to the federal government and a legal loophole that lets builders and bankers ensure a steady stream of asset-challenged borrowers for taxpayer-insured loans.

With quietly expanded powers, the Federal Housing Administration is already offering the next-best thing to nothing down on a house: a payment of just 3.0% will get practically any American with a pulse and a job a mortgage of up to $729,000, at least until the end of this year.

But for those who lack the wherewithal to put even a little skin in the game, there's a workaround: a not-for-profit organization can give prospective buyers the teensy downpayment. The spigot is wide open. Of the 180,881 loans that the FHA insured in the first half of fiscal 2008, 36.7%, or 66,337, were seller-funded. With home builders and sellers desperate to make sales in a slowing real estate market, this percentage is likely to grow. (See "Builder's Block")

The FHA has traditionally allowed family and friends to gift a downpayment to homebuyers. In the last 10 years, homebuilders and sellers have gotten into the act by funneling their upfront consideration through down-payment assistance not-for-profits. Technically wiping out a conflict of interest, the charitable outfit collects the cash and hands it over to the mortgage lender taking a bit off the top for all its trouble.

According to a 2005 U.S. Government Accountability Office report, the sleight-of-hand results in higher home prices for FHA borrowers. The agency found that homes sold with nonprofit assistance were appraised and sold for prices about 2 to 3 percentage points higher than comparable homes without such assistance. The report said that appraisers interviewed had sometimes been pressured by lenders, real estate agents and sellers to increase home prices to “bring in the value.”

Not only does this practice burden FHA borrowers with pricier homes, it also increases the odds that the new homeowners can't afford their monthly mortgage payments. Indeed, seller-financed, no-downpayment loans have default rates that are three times the FHA average.

No need for loan originators to worry about defaulting loans; taxpayers shoulder the risk that these loans bring to the FHA's pool of loans. All of the mortgages insured by the agency are backed in full by the U.S. government so when borrowers default, Uncle Sam takes the hit and makes the mortgage payment instead.

The FHA tried and failed to unilaterally prohibit the seller-funded loans last year. After it issued a decree that the practice's end was nigh, Sacramento-based Nehemiah, a market leader in seller-backed financing, challenged the agency's ban and won. The judge ruled against the Department of Housing and Urban Development 's policy shift for failing to provide follow protocol in announcing the change.

Seller-funded nonprofit operations are being investigated by the Internal Revenue Service. In May 2006, the agency said it had found "that organizations claiming to be charities are being used to funnel down payment assistance from sellers to buyers through self-serving, circular financing arrangements." Since February 25, 2008, 47 of these middlemen have had their not-for-profit status revoked by the IRS.

The financiers of these not-for-profits are naturally reluctant to advertise their back-door lending, but after requesting permission from its partners Nehemiah said that builders that work with it include Lennar (nyse: LEN - news - people ), Pulte Homes (nyse: PHM - news - people ), and Shea Homes. A glut of inventory in a slowing market has the builders scrambling for sales. (See "Falling Prices Haunt New Houses")

Nehemiah also identified some of its lending partners: Wells Fargo (nyse: WFC - news - people ), Bank of America (nyse: BAC - news - people ), JPMorgan Chase (nyse: JPM - news - people ), and National City (nyse: NCC - news - people ). Interestingly, the FHA has not pulled its certification of these lenders, even though it opposes their participation in the financing arrangements.

Pulte Homes Reports First Quarter 2008 Loss At $696.1 Million

2008-05-01T17:43:00.001-04:00

BLOOMFIELD HILLS, Mich., April 23 /PRNewswire-FirstCall/ -- Pulte Homes (NYSE: PHM) announced today financial results for its first quarter ended March 31, 2008. For the quarter, the Company reported a net loss of $696.1 million, or $2.75 per share, compared with an $85.7 million net loss for the prior year first quarter, or $0.34 per share. The first quarter 2008 net loss included $663.6 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $132.1 million. Consolidated revenues for the quarter were $1.4 billion, a decline of 23% from prior year revenues of $1.9 billion.

"The difficult housing environment continued to erode during the first quarter of 2008," said Richard J. Dugas, Jr., President and CEO of Pulte Homes. "Buyer demand for new homes continues to be soft, home prices remain under pressure, and overall buyer confidence is weak. Despite these market challenges, Pulte continues to make progress on its cash position, selling homes and reducing its cost structure. Our results were better than the guidance previously provided of a loss of $0.15 to $0.30 per share from continuing operations, exclusive of any impairments or land-related charges. This performance was accomplished through a company-wide commitment to sell and close homes during the quarter and continued efforts to control overhead. We also reduced both our level of speculative inventory and number of controlled lots. We ended the quarter with a $1.1 billion cash balance, inclusive of a $212 million tax refund, and no debt outstanding under our $1.6 billion revolving credit facility. Pulte will continue to position the company to capitalize on any market stabilization and eventual recovery."

Revenues from homebuilding settlements in the first quarter decreased 22% to $1.4 billion compared with $1.8 billion last year. The change in revenue for the quarter reflects a 13% decrease in closings to 4,733 homes, and an 11% decrease in average selling price to $295,000.

First quarter homebuilding pre-tax loss was $705.1 million, compared with a $148.4 million pre-tax loss for the prior year quarter. The pre-tax loss for the 2008 first quarter reflects a decline in gross margins primarily related to the impact of impairments recorded in connection with our land inventory. Homebuilding SG&A expense decreased $79.7 million, or 28%, compared with the prior year quarter. During the first quarter of 2008, the Company recorded $663.6 million of impairments and land-related charges, including $598.8 million related to land impairments, $0.3 million associated with the write-off of land deposits and pre-acquisition costs, and $64.5 million of impairments of land held for sale. For the prior year quarter, these impairments and land-related charges totaled $132.1 million.

Net new home orders for the first quarter were 5,402 homes, valued at $1.5 billion, which represent declines of 36% and 50%, respectively, from prior year first quarter results. Pulte Homes' ending backlog as of March 31, 2008 was valued at $2.6 billion (8,559 homes), compared with a value of $4.7 billion (13,334 homes) at the end of last year's first quarter. At the end of the first quarter 2008, the Company's debt-to-capitalization ratio was 49%, and on a net debt-to-capitalization basis was 40%.

The Company's financial services operations reported pre-tax income of $15 million for the first quarter 2008, compared with $13.2 million of pre-tax income for the prior year's quarter. The increase in first quarter 2008 pre-tax income was partially due to a shift in the mix of mortgage loans closed toward more profitable agency-backed products. This was partially offset by a 32% decline in mortgage loans originated during the quarter compared with the prior year's quarter. The mortgage capture rate for the quarter was 89.9%, compared with 93% for the same quarter last year.

VisualTube.com

2008-04-08T22:07:00.000-04:00

Chelsea Clinton

2008-03-26T15:55:00.004-04:00

March 26, 2008

Dear Greg,

When I heard that Elton John was throwing a concert in New York for my mom's campaign, I knew it was going to be a night I didn't want to miss.

Want to join me there?

My mom's campaign is bringing two supporters and their guests to New York on April 9 for both Elton John's one-night-only concert and the party after the concert. It's going to be a great night and a great time.

It's such an important time to support my mom's campaign. There are big contests coming up, starting with Pennsylvania, and I know she can win with your support. She's working so hard out on the campaign trail, and I know that your support makes a real difference to her and this campaign.

Join me, my mom, and Elton John for his one-night-only concert in New York on April 9.

I talk to a lot of people who are excited to see my mom win and be the president we all need -- and who are working hard to help make that happen. It means so much to me to know that there are so many people like you who believe in my mom and are working to help her win. I know that she'll be such a great president and she will win, but not without all our help. And what better time to help than right now?

I'm so grateful for everything you're doing to help my mom win!

Thank you!
Chelsea

EH Systems Purchases SIP Equipment From Pulte Homes

2008-03-19T17:40:00.002-04:00

By Greg Bowden

"Pulte Homes Going Out of Business Sale"

March 19, 2008

Sounds to me that they are liquidating anything not nailed down. Going out of business sale coming?

NEW BRAUNFELS, Texas, EH Systems Holdings, LLC, (www.ehsystemsllc.com ) announced today it has purchased equipment from Pulte Homes, including structural insulated panel (SIP) manufacturing and fabrication systems, open web floor truss assembly systems, pre-assembled flooring equipment and metal stud forming and wall panel machinery. This purchase will allow EH Systems to quadruple their production capacity making them one of the top three SIP manufacturers in the country.

A SIP typically consists of two sheets of oriented strand board (OSB) which sandwich a rigid sheet of expanded polystyrene (EPS) foam that is coated with a structural adhesive. EH Systems provides SIP panels to single family homebuilders throughout Texas and along the Mississippi Gulf Coast. SIP panels make buildings stronger and more energy efficient and can be built in less time than traditional stick-built construction.

"Prior to the purchase of this equipment, we manufactured panels that were four feet wide and up to 24 feet in length, which limited our distribution to mostly single family home builders," said Mac McDonald, president, Andover Capital Group, parent company of EH Systems Holdings, LLC. "EH Systems will now manufacture single panels up to nine feet wide and 24 feet in length and wall sections up to 32 feet in length. The larger panels will provide our current customers with a more versatile product and will allow us to expand into other markets segments such as institutional, government, commercial and multi-family construction."

EH Systems will combine their specialized SIP roofing system to the SIP wall systems developed by Pulte, which will create an even stronger and more durable home. When the building envelope is combined with the open web truss, floor decking and metal stud wall panels it is energy efficient, can be built in less time with less on-site labor and provides superior strength.

EH Systems Holdings, LLC, is headquartered in New Braunfels, Texas, and is a subsidiary of Andover Capital Group, Nashville, Tenn. EH Systems manufactures SIPs for commercial and residential construction. The company developed a "systems approach" to building by integrating different products to help create a stronger, safer, and more energy efficient structure. For more information on EH Systems, visit www.ehsystemsllc.com .

SOURCE EH Systems Holdings, LLC

More Bad News on New Home Sales

2008-03-01T18:06:00.003-05:00

By Greg Bowden

March 1, 2008

As the new home sales report was released, there was not a lot of good news. Sales fell to a seasonally adjusted annual rate (SAAR) of 588K, a decline of 2.8% from the 605K rate in December (revised slightly higher from 604K). Relative to a year ago, sales are down 33.9%. Sales are languishing despite declines in prices. The median price fell to $216K, down 4.3% from December and down 15.1% from a year ago.

If one really wants to search for good news, inventories are down, with 482K houses for sale -- that's a 2.2% decline from last month, and 10.1% lower than a year ago. However, if one looks inside even the 'positive' inventory numbers, things are not all that good. New home inventories are broken into three groups, not started (basically improved lots), under construction, and completed.

Relative to a year ago, the number of improved lots is down 11.0%, the number under construction is down 23.1%, but the number of fully finished houses waiting for people to buy and move in is actually up 10.2%. The decline in under-construction inventories is to be expected given the dramatic decline in housing starts, but homebuilders really need to clear out the inventories if they ever hope to return to profitability.

The months supply figures are based on the total inventories and they rose to 9.9 months from 9.5 months in December and 7.2 months a year ago. These figures are roughly comparable to the 10.3 months of existing homes supply.

As usual, there was a fair amount of regional difference in the numbers this month. The West fared the best, with sales actually rising 2.2% on the month and down 16.5% for the year. Worst hit for the month was the Northeast, which fell 10.3% and is down 16.1% on a year-over-year basis. The extremely important (54.6% of total sales) South region was down 2.4% for the month and is down 34.8% year over year. The Midwest fell 7.6% for the month and is down a whopping 56.0% on a year over year basis.

In terms of price range, starter houses (under $200K) actually posted an increase in sales of 18.8% on a monthly basis, move-up houses (between $200 and $500K) were down 8.3% and McMansions (over $500K) were flat. On a year-over-year basis, however, starter homes are down 20.8%, move-up houses are down 37.1%, and McMansion sales have plunged 62.5%. The price range numbers are based on actual sales, not the seasonally adjusted annual rate, and there are some serious rounding problems in making them fit with the SAAR numbers.

The homebuilders have had a very serious bounce over the last few months, but I seriously doubt that can continue. The fundamentals of the business are still downright awful, and before all is said and done, serious capacity has to be taken out of the industry. That means that several of the big publically traded builders have to go belly up. Continue to avoid all of the builders like Lennar (NYSE: LEN - News), Pulte (NYSE: PHM - News), Standard Pacific (NYSE: SPF - News), D.R. Horton (NYSE: DHI - News) and Beazer (NYSE: BZH - News).

Form 4 Filed on Previously Announced Transaction Involving Pulte Homes Chairman William J. Pulte

2008-03-01T17:58:00.002-05:00

By Greg Bowden

Form 4 Filed on Previously Announced Transaction Involving Pulte Homes Chairman
Thursday February 28, 4:13 pm ET

BLOOMFIELD HILLS, Mich., Feb. 28 /PRNewswire-FirstCall/ -- A Form 4 was filed today with the Securities and Exchange Commission by William J. Pulte, founder and Chairman of Pulte Homes, Inc. (NYSE: PHM - News), reflecting a previously announced proposed transaction covering the intended sale of 3.8 million shares of company stock controlled by Mr. Pulte through a prepaid variable forward contract worth over $54 Million. This completes the steps required to establish the contract, which has a settlement date of March 4, 2009.

Pulte Homes Headed For Bankruptcy

2008-03-01T17:44:00.003-05:00

By Greg Bowden

March 1, 2008

Pulte Homes has been a major contributor to the current housing crisis and they need to be held accountable for their actions. They have knowingly sold hundreds of houses in distressed markets in the Southwest USA to investors who they knew had no intention of occupying them, solely in order to mazimize their short term profits. When one investor buys six houses, do you think they will be owner occupied? These neigborhoods are now full of foreclosed homes and renters. Homeowners who bought from them in good faith have been burned and will not buy from them again. First time buyers will not be able to obtain loans due to knee-jerk tightening of underwriting criteria by lenders, who used to lend to anyone who had a pulse, but jacked up their rates despite the lowering of rates by the FED. The current housing crisis cannot end until companies like PMH are flushed out.

Pulte Reports 5th Consecutive Quartely Loss

2008-02-23T07:50:00.003-05:00

By Greg Bowden

Pulte Homes reported its fifth consecutive quarterly loss last month as orders fell 29 percent to 4,562 homes for the period ending Dec. 31. Closings declined 31 percent to 8,714. The builder finished the year with $1.1 billion in cash and Dugas said he expects to add another $1 billion in 2008.

"We've got more than enough cash flow coming in to sustain ourselves for quite sometime," Duggas said. Well if that is the case, why did Bill Pulte sell 3.8 million shares? Lies-Lies & more Lies. Remember, there were numerous people at Pulte's Detroit headquarters who were fired because they were telling others how bad Pulte is doing.

America's Free-Falling Housing Markets

2008-02-15T20:35:00.002-05:00

By Greg Bowden

2-15-08

Residents of Sacramento, Calif., where home sale prices for November 2007 fell a startling 18.6% over the year before, are likely breathing a sigh of relief.

That's because homeowners there stand to benefit from the Bush administration's initiative, announced this week, aimed at helping homeowners facing foreclosure. Called "Project Lifeline," and assembled by six of the nation's largest financial institutions, which service almost half of the country's mortgages, the program allows qualified homeowners to suspend proceedings for 30 days while providing them with rewriting and refinancing assistance.

The lenders involved--JPMorgan Chase, Bank of America, Countrywide Financial, Citigroup, Washington Mutual and Wells Fargo--say they will contact homeowners who are 90 days or more overdue on mortgage payments and work with them on ways to make their mortgages more affordable.

"There'll be homeowners who still take no action, and some will still walk away," said Treasury Secretary Henry Paulson at a news conference today. "But some borrowers facing immediate foreclosures may find solutions."

While resetting rates on many of these mortgages are causing homeowners to default, falling prices, which lead to negative equity, are also playing a part. Negative equity occurs when the homeowner owes more on the home than the home is worth, and thus has little incentive to make payments.

Then there are the homeowners who took out "piggyback" loans--getting a second mortgage to pay the down payment on the first--leaving them saddled with mounting debt, yet unable to unload a home that's dramatically dropping in value.

Behind The Numbers

To assess which cities are hardest hit, we used data from Radar Logic, a New York-based real estate research firm. Radar Logic differs from the more familiar Case-Shiller index in that it tracks more markets (25), includes data on foreclosures, condos and new construction, and is a spot price, not a running average.

ZipRealty, a San Francisco-based real estate tracking firm that aggregates multiple listing service data, provided us with the number of homes on the market that have been relisted below their initial asking prices.

In Sacramento, 43.6% of homes on the market have been lowered in price. There are currently 36,097 homes on the market there, with very few potential buyers.

Just lagging Sacramento is Las Vegas, where between November 2006 and November 2007, prices plunged 17.2%. What's more, from December 2006 to December 2007, the number of homes on the market surged by 30%, further stalling sales, and likely leading to more price depreciation down the road.

A city you might have expected to see higher on the list-- Detroit--finished ninth. Simply put, there just isn't much further for the city's housing prices to fall; in percentage terms, it doesn't look as depressed as other (once over-inflated) markets. In some areas of Motor City, banks are literally giving homes away if the buyer agrees to bring it up to code.

Florida nabbed three spots on the list of 10 fastest-falling markets, with Tampa down 11.7%, Miami depressed by 10.6% and Jacksonville in an 8.7% decline from last year.

The one sign of good news in these markets is that construction has all but stopped, and sellers are starting to get realistic about cutting prices.

For full-year 2007, almost every market experienced an inventory spike, but in the last month of the year, according to ZipRealty's numbers, inventories started to decline nationwide. Even in Sacramento and Las Vegas, inventory numbers have started to fall, if only marginally.

Chelsea Clinton

2008-02-14T21:26:00.002-05:00

2-14-08

Dear Greg,

My friends ask all the time: "What can we do to help your mom win?"

Well today I have an answer for them and for all of us who support my mom: we can make 1,000,000 calls.

OK, no one person has to make all 1,000,000 calls! But supporters like you and my friends are the best people to speak out on my mom's behalf -- and we need to talk to a lot of voters in the next few weeks.

It's simple: the more people we talk to about why each of us so strongly supports my mom, the more people will get out and vote for her.

If you sign up today to make calls for as little as an hour a week, you can help us reach 1,000,000 voters over the phone before the next big contests.

Please help my mom -- and all of us -- win by signing up to call voters for her campaign!

It's an amazing experience to meet so many people who are working so hard on my mom's campaign and to meet so many more who want to get involved and make a difference in this critical moment.

In less than three weeks, we're facing big races in states like Ohio and Texas. In fact, there are races all over the country where my mom needs help -- and we have to contact a lot of voters in a very short time! I know so many of you have shown a ton of dedication to my mom since Super Tuesday, and I'm sure that working together we will have no problem making our 1,000,000 call goal!

Can you help out? I hope so! Sign up for as little as an hour of calls a week, and you can make a huge difference toward reaching all those people in the next three weeks.

Sign up now to help us call 1,000,000 people for my mom.

Thank you so much for all you're doing to help my mom win!

Chelsea

FBI probes 2 more companies in subprime crackdown

2008-02-14T20:51:00.006-05:00

By Greg Bowden

2-14-08

WASHINGTON - The FBI recently opened two more investigations, bringing to 16 the number of corporations now being probed as part of its crackdown on subprime mortgage industry fraud, a bureau spokesman said on Thursday.

FBI spokesman Bill Carter said the two other investigations started after January 29, when FBI officials told a news briefing that 14 corporations involved in subprime lending were under scrutiny as part of an initiative launched last year.

FBI officials have said the companies range across the financial services industry, from mortgage lenders to investment banks that bundle loans into securities sold to investors.

The FBI also is investigating possible insider trading by some executives, (9 Pulte Executives involved in insider trading) the officials have said. Carter said the FBI was working closely with the Securities and Exchange Commission in some of the investigations.

FBI and U.S. Justice Department officials said criminal charges were imminent.

At a House Judiciary Committee hearing last week, Attorney General Michael Mukasey said he could not comment on the FBI's investigations, but said the subprime issue would be a priority.

Mukasey said there first needs to be a gathering of the facts and then decisions would be made on whether prosecutions need to be brought.

(Pulte Homes) (Pulte Mortgage) are in the cross hairs.

William J. Pulte Is Bailing Out

2008-02-11T20:37:00.000-05:00

By Greg Bowden

2-11-08

Bill Pulte is selling 3.8 million shares, gets the cash now, and still retains control over the stock, AND should it go up, he still gets any potential profit!! AM I missing something? I wish I had such a deal......it's a 100% no lose situation. This is a prime example of abuse in my opinion, but hey, sell if you don't like it. I know I wouldn't go near this any time in the future.

BLOOMFIELD HILLS, Mich. (AP) -- Pulte Homes Inc. said late Monday Chairman William J. Pulte has filed with the Securities and Exchange Commission to sell up to 3.8 million shares, or 9 percent of his personal stake in the homebuilder, through a prepaid variable forward contract.

The contract allows the chairman to receive cash now, while also having the right to maintain ownership of the stock at the end of the contract's one-year term by settling it with cash. He may also keep an interest in a possible increase in the shares' value over the next year.

Pulte Exits Wiregrass Ranch Project In Florida

2008-02-10T19:37:00.000-05:00

By Greg Bowden

2-10-08

WESLEY CHAPEL - The developers of Wiregrass Ranch confirmed Monday that Pulte Home Corp. has pulled out as the massive project's master builder.

"We've had a divorce," said Don Porter, head of the family-owned company that four years ago set out to develop its 5,000-acre homestead in the heart of Wesley Chapel.

Plans for the ranch called for creating a city-sized project - complete with a hospital, shopping mall and government complex - that could become the downtown core of a sprawling area that lacks one. At the time, Pulte was tapped as the project's lead developer.

Pulte still owns more than 900 acres of the ranch, but is no longer responsible for the long-term development of roads and other infrastructure, said Scott Campbell, president of Pulte's Tampa division.

Pulte's pullout casts doubt on the future of the grid of public roads across Wiregrass that county officials saw as a way to improve traffic in the region. Those roads were to have been built by Pulte.

The lone road project still moving forward - the eastern extension of State Road 56 - is now the responsibility of Forest City Enterprises and Goodman Co., the two companies developing the Shops at Wiregrass mall at the junction of S.R. 56 and Bruce B. Downs Boulevard. Pulte was to have built the extension.

With the unraveling of its Wiregrass plans, Michigan-based Pulte has effectively vanished as an active builder in Pasco's housing market. Pulte recently sold off its Lakeside project in Hudson, where it holds a few home lots. It also sold off another project, Lake Hutto in Hillsborough County.

There are no plans to sell the Wiregrass property, Campbell said.

"As of Jan. 28, we're going to hold onto it," Campbell said. Pulte plans to seek rights from the county to one day build homes on the property, he added.

Pulte began rethinking its Wiregrass plans last summer, Campbell said. The decision was influenced, in part, by the years spent striking a deal with county and state regulators and also by more than $560 million in county-mandated improvements required of the project, he said.

County commissioners approved the Wiregrass Ranch deal by a 3-2 vote in July. The approval made Wiregrass the largest development ever approved in Pasco and the first time the county had agreed to help a developer build its roads. Pulte's decision to pull out of the project won't affect those approvals.

The vote came just as the housing market hit the skids.

"As the process went along, it did not make sense to us to continue to be the master builder," Campbell said.

Pulte's decision to step aside formally killed its plans to build an age-restricted golf community under its Del Webb subsidiary. That land was returned to the Porters in an August land swap for property on the western side of the ranch, Campbell said.

"The parcel we had envisioned for Del Webb still has age-restricted zoning, so someone could build an age-restricted community there," Campbell said.

At the moment, Pulte's Wiregrass holdings consist of two parcels - land designated for multifamily use near the Shops at Wiregrass mall under construction and a tract to the north originally designated for Pulte's DiVosta brand.

The DiVosta property contains the beginnings of Chancey Road's western end and the early stages of residential development. Work there stopped abruptly last summer, about the same time Pulte was having second thoughts about continuing with Wiregrass.

Campbell said the DiVosta property has no utilities or other infrastructure to maintain. The company has no plans to seed the bare ground with grass or take other measures to avoid erosion of the land, he said.

"There's nothing that needs to be done there to keep it viable," Campbell said.

In an interview with The Tampa Tribune last summer, Porter said his family was willing to wait out changes in the housing market, should a downturn come.

On Monday, Porter said he's seeking another company to develop the ranch.

"I would not be forthright if I said we aren't talking to people. We are," Porter said. "Some stuff I am not at liberty to give a lot of flesh to."

Investors

2008-02-07T19:31:00.000-05:00

By Greg Bowden

2-8-08

Fed Chairman, Ben Bernanke is frantically lowering interest rates and pumping billions of newly-printed dollar bills into the economy. It’s a valiant attempt to stop the ever-expanding housing crash and mortgage meltdown from sending the economy into a recession.

Yet, the subsequent plunge of the dollar has been rapid. Moreover, market volatility has serious investors concerned about what to do next.

PULTE HOMES INC/MI/ Files SEC form 8-K, Entry into a Material Definitive Agreement

2008-02-05T20:03:00.000-05:00

By Greg Bowden

2-5-08

Looks like Pulte Mortgage bankers are getting nervous.

If any of the rating agencies were to lower any of Pulte's unsecured debt below a certain threshold, the bank has the option of demanding payment right away.

This could seriously reduce Pulte's flexibility in how they conduct business. Especially if they have to come up with funds in a hurry to satisfy any outstanding balance.

Pulte is being put on a shorter leash since the maximum availability of borrowings under this facility has been cut in half.

It's going to be much worse in 2008

2008-02-04T20:41:00.000-05:00

By Greg Bowden

2-4-08

I am predicting a recession in the U.S. economy and I am shorting the shares of now-tanking Wall Street investment banks. And with fears of a recession sparking both a worldwide market sell-off and emergency action from Federal Reserve chairman Ben Bernanke. You should be extremely worried. I just see things getting much worse this time around than expected. Bernanke's decision to ride to the market's rescue with a 75-basis-point cut in the Fed's benchmark rate only a week before its scheduled meeting (at which time they cut it another 50 basis points) is the latest sign that the central bank isn't willing to provide the fiscal discipline that he thinks the economy desperately needs.

"Conceivably we could have just had a recession, hard times, sliding dollar, inflation, etc., but I'm afraid it's going to be much worse. "Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."

The Fed's willingness to add liquidity to an already inflationary environment and the history of the 1970s repeating itself. Does that mean stagflation? "It is a real danger and, in fact, a probability.

Where the opportunities are:

"A Bull in China: How to Invest Profitably in the World's Greatest Market."

I was rooting for a serious correction in China to cool off an overheating market and bring back prices to a reasonable level. With the bourses in Shanghai and Hong Kong both some 20% off their recent highs as of late January, I am starting to consider new investments.

"I'm delighted to see what's happening in Shanghai and Hong Kong. "As I've said, if things hadn't cooled off, the Chinese market was in danger of turning into a bubble. I find this most encouraging. The government's been doing its best to try and cool things off. Mainly they've been trying to deal with real estate but it's having an effect on stocks, too. I would suspect the correction isn't quite over in China. But I'm gearing up. I didn't put in any orders for tomorrow but I'm starting to prepare my list of things to buy in China. Whether I buy this week or this month or this quarter, who knows. But I'm starting to think about buying new shares in China for the first time in a while. And I'm not thinking about buying in America."

Ultimately, I don't think that the troubles in the United States will be much of a drag on the prospects for the People's Republic. "Anybody who sells to Sears (SHLD, Fortune 500) or Wal-Mart (WMT, Fortune 500) is going to be affected, without question. "Some parts of the Chinese economy are going to be untouched, however. They won't even know America's in recession. They won't care if America falls off the face of the earth."

“We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene.”

What's on my China buying list? It will depend in large part on which stocks come down to the right level, but I'm keeping my eye on certain high-growth sectors including tourism, agriculture, power generation and airlines.

The pullback in commodity prices on recession fears haven't dampened my enthusiasm for resources investments, either. More like a cyclical correction in the middle of a long-term bull market. "Certainly some commodities are going to be affected. "But it's not as if the markets haven't figured this out. Remember the old expression: Dr. Copper is the best economist in the world. Well, Dr. Nickel and Dr. Zinc figured out a few months ago what I thought I had figured out, that we were going to have a recession. Nickel is already down 50%. Other commodities may fall more. But I don't see the economics of agriculture being much affected at all. Maybe there will be a few less cotton shirts bought. Maybe there will be a few less tires bought. But the supply is under more duress than the demand.

Once again I am drawing on the 1970s analysis. "Think about the story of gold in the '70s. "Gold went up 600%, and then it started correcting. It went down nearly every month for two years, nearly 50% from the high point. And everybody said, Well, that's the end of the gold market. It was just a fluke. It's over. It scared everybody out. And then gold turned around and went up 850% from that level. This is what happens in markets. But the fundamentals of the secular bull market in commodities are not over any more now than they were for gold in the '70s.

Where I expect the pain to be most intense is on Wall Street. I haven't covered my short positions on the investment banks or Citigroup (C, Fortune 500) and won't for a while. "Those things are going to go way, way, way down. "The investment banks are down now because of the problems in the credit market. Wait until the effects of the bear market come along. If you just go back and look at other bear markets, investment bank stocks have gone down enormously. We haven't gotten to that stage yet. It's going to bring their balance sheets under duress. This is going to get much worse. But that's where there have been excesses for the past decade or so. And whenever you have a bear market come along the great excesses of the previous period are the ones that get cleaned out the most.

The darker side of interest rate cuts:

For now, all those worries aside, the market expects to see interest rates go lower. Given the scale of losses tied to the collapse of the housing bubble - the decline in real estate prices in coming years could cut household wealth by $4 trillion to $6 trillion, according to some estimates - economists say it's understandable that the Fed is doing what it can to support growth.

Rising inflation "is not a factor restraining the Fed at the moment. The Fed views the current situation as "maybe a little scarier than the typical downturn" because of problems in the credit markets that threaten to starve businesses of capital needed to fund expansion.

Because of hefty losses on mortgage-related debt, banks like Citi (C, Fortune 500) and Bank of America (BAC, Fortune 500) have been raising billions of dollars just to boost their capital cushion for future losses. Setting aside bigger reserves means less money for lending to businesses and consumers.

That's why economists like David Rosenberg, chief North American economist at Merrill Lynch, expect the rate cuts to keep on coming. Rosenberg wrote Wednesday that he expects the Fed to cut the fed funds target by half a percentage point, to 3 percent, at the Jan. 29-30 regular meeting of its Federal Open Market Committee policymaking arm. If the Fed does as Rosenberg expects, it will have cut short-term interest rates by 1.75 percentage points in just four months, all in the name of defending an economy that so far hasn't dipped clearly into recession.

But that's not all: Rosenberg believes that in view of warning signs ranging from weakening employment data to soft manufacturing numbers, the Fed should keep on cutting. He is calling for the fed funds rate to fall as low as 1 percent, in a bid to limit the economic damage from falling house prices and tightening lending standards. A fed funds rate of 1 percent would match the low reached in the aftermath of the mild 2001 recession. "This may sound aggressive, but Fed easing cycles in recessions almost always see the prior tightening cycle completely unwind," Rosenberg writes. "The serious nature of the current housing deflation and credit crunch environment makes the case for an aggressive easing in policy all the more compelling."

Compelling as it may be, a rate-cutting policy may not always have the desired salutary effect; after all, Japan effectively had interest rates of near-zero percent for years without emerging from its economic gloom. And it carries its own costs. Lower rates boost the economy by making big purchases such as houses more affordable. They can also help banks rebuild their balance sheets, by enabling them to borrow at lower rates and lend at higher ones. But lower rates also tend to reduce the value of the dollar, which has already fallen sharply in recent years amid a surge in U.S. consumption funded by overseas borrowing. Further declines in the dollar raise the risk of boosting inflation, which hurts consumers by reducing their purchasing power.

Even with real estate prices poised to keep falling for some time, inflation worries can't be deferred forever. The Fed "may have to wrestle with that beast" down the road and warns that even if it's possible for the Fed to cut interest rates further, Bernanke and his colleagues should be careful about heading down the road toward 1 percent rates. "Anything below 2.5 percent would have me worried. Cutting rates more sharply runs the risks of "sowing the seeds for the next problem" in the economy, very much as the Fed's low-rate policy during the recovery of 2003 and 2004 fed the housing bubble that is now deflating.

Keeping rates too low even as a recovery starts is an error that central bankers have been making for years, and will presumably continue to make, to everyone's chagrin. "This is a problem monetary policy has been making for half a century.

DR Horton Warns of Grim 2008

2008-02-04T17:50:00.000-05:00

By Greg Bowden

2-4-08

The chairman of Fort Worth-based D.R. Horton home builder warned Thursday that the sharp downtown in housing sales nationwide is expected to continue in 2008.

Donald R. Horton told company shareholders at their annual meeting that 2008 is going to be more difficult than 2007.

"The home-building industry is not in a recession," he said. "It's in a depression."

Horton said the company will continue to cut costs as it adjusts to weakened consumer demand. It is pulling back on starts, having cut back by 42 percent in 2007. And it is paring back its exposure in areas hit hard by the bursting of the housing bubble, trying to reduce its five offices in California to one, for example, he said.

The company has also whittled existing inventory by 50 percent in the past year, he said.

D.R. Horton joins other publicly traded home-building companies that have been posting grim earnings results in recent quarters. D.R. Horton posted an annual loss for the first time in its almost three-decade-long history.

But at Thursday's meeting, Horton presented a number of slides that show how his company is doing better than the country's other largest builders during a tumultuous year.

Questions about bonuses

The downturn in the housing market prompted the Laborers International Union of North America to request that the company's executives have their compensation more closely tied to performance. The union represents construction workers and has more than 100 different investment funds, representing more than $30 billion in assets. Many of those assets are invested in home-building companies and mortgage lenders.

"We just think that in order to get bonuses, they should be outperforming their peer group," said Jennifer O'Dell, union spokeswoman.

Shareholders voted the proposal down by a wide margin.

The union also filed similar proposals at KB Home, Simon Property Group, Countrywide Financial, Wal-Mart, Lowes, Goldman Sachs, Lennar and Morgan Stanley, O'Dell said.

Performance pay

Shareholder activists, including some pension funds, have increasingly called for corporate pay to be more closely tied to company performance, said Paul Hodgson, a senior research associate at The Corporate Library.

Generally, executive pay has increased 12 percent to 15 percent in each of the past three years, he said.

The company's philosophy on executive compensation is one that will "attract, motivate and retain highly qualified and experienced executives, reward superior performance and provide incentives that are based on performance of the company," according to the proxy statement filed in December.

What it means

The compensation is important to keep executives from being lured to a competitor. Plus, many executives are veterans of downturns in the home-building market, which the report indicates would be valuable now that challenging times are back.

The company's stock (ticker: DHI) gained 10.5 percent Thursday, to close at $17.26 a share

Executive pay

D.R. Horton's top four executives received the following compensation in 2007. Chairman Don R. Horton and Donald Tomnitz each received $12 million in bonuses in 2006.

Don R. Horton, chairman: $3,096,939

Donald Tomnitz, vice chairman, president and chief executive: $2,784,182

Gordon Jones, vice president and region president: $1,163,547

George Seagraves, vice president and region president: $1,021,063

Pulte Home Corp. and Del Webb Homes illegal Mortgage

2008-02-02T15:58:00.000-05:00

By Greg Bowden

2-2-08

Pulte Home Corp. and Del Webb Homes illegally require homebuyers to use their affiliated mortgage companies, Pulte Mortgage and Dell Webb Mortgage Corp., to buy a home, a class-action complaint claims in Placer County Court, Calif.

http://www.courthousenews.com/2008/01/04/PulteDelWebb.pdf

Always-profitable Pulte loses $2.25 billion in 2007

2008-02-01T18:14:00.000-05:00

By Greg Bowden

2-1-08

Pulte Homes Inc. lost a whopping $2.25 billion in 2007 and revenues fell 35% to $9.3 billion, the first annual red ink in the Bloomfield Hills-based company's 58-year history, as the housing market went into a free fall.

"The depth and duration of this downturn remains difficult to predict," said Richard J. Dugas Jr., Pulte president and chief executive officer, during a conference call with analysts Thursday.

Still, investors reacted positively. Pulte stock closed 20.5% higher, or up $2.78, to $16.35 a share on the New York Stock Exchange. The shares' 52-week range is $8.20 to $35.56.

A combination of record foreclosures, falling home prices, weakening consumer confidence, tightening credit and large numbers of unsold homes on the market have hurt sales of new homes.

"The challenging market conditions that plagued 2007 will likely have a significant impact on 2008 as well," Dugas said.

He said the company projects a net loss from continuing operations of between 15 cents and 30 cents a share.

Pulte is a new home builder and land developer with operations in 26 states, and is the nation's largest builder of communities for people age 55 and older under its Del Webb brand.

The company reported a net loss for the quarter ended Dec. 31 of $874.6 million, or $3.46 a share, compared to a loss of $8.4 million, or 3 cents a share, in the same quarter in 2006. Analysts expected a loss of 50 cents per share, according to Thomas Financial.

The 2007 loss of $2.25 billion, or $8.94 a share, compares to a profit of $687.4 million, or $2.66 a share for 2006. The loss includes $543.3 million in inventory write-downs and land-related charges.

"We continue to size our business for decreased demand," Dugas told analysts. "We continue to ratchet back our investment in land development."

Pulte's land sales generated $77 million in the fourth quarter, more than double the $32 million in land sales for the same period a year ago. The company also dropped options it held on 4,800 lots and suspended plans for or mothballed 58 communities.

The company ended the year with $1.1 billion in cash and expects to end 2008 with as much as $2.2 billion for future investment.

Susan Berliner, an analyst with Bear Sterns, questioned Pulte executives on their strategy behind "hoarding a massive amount of cash."

Roger Cregg, chief financial officer, said: "We are watching all the signs. As we manage all these in a very tumultuous market, we are watching all the indicators and making sure we understand them before we launch off in one direction or another.... Our goal has been to build cash and hold onto it."

Pulte said new orders during the quarter fell 29% to 4,562. It also closed on 8,714 homes in the quarter, a 31% drop from the same quarter in 2006. The average sales price per home fell 6% to $319,000.

Pulte Seen Holding The Line On Home Prices As Orders Drop 29%

2008-02-01T18:10:00.000-05:00

By Greg Bowden

2-1-08

BOSTON (Dow Jones) -- Pulte Homes Inc.'s orders for new homes fell harder than those of peers in the latest quarter, suggesting it's offering relatively thinner price cuts and incentives, a move that could hurt the home builder later, a Wall Street analyst said.

The Bloomfield Hills, Mich., company (PHM) after Wednesday's closing bell reported a wider fourth-quarter loss as new orders fell 29% from a year earlier to 4,562 units.

"To us, this indicates that Pulte did not respond to market trends as much as Ryland (RYL) and Centex (CTX), which reported order declines of 7% and 10% respectively," wrote Banc of America Securities analysts led by Daniel Oppenheim, in a research note.

"We think this will lead to two issues: further declines in margins when they adjust pricing and more importantly, increased cancellations as buyers in backlog see the lower prices," the report said.

Pulte, the nation's third-largest home builder, reported a loss of $874.7 million, or $3.46 a share. The loss included $543.3 million of charges related to inventory write-downs, other land-related charges and impairment of goodwill. It also took a $622 million charge related to deferred tax assets.

Pulte said it ended the year with $1.1 billion in cash, exceeding its goal, and no debt outstanding under its $1.86 billion revolving credit facility. The company got some breathing room this summer when it renegotiated the covenants with its lenders.

With its focus on the active-adult market, Pulte is "well positioned to take advantage of significant demographic tailwinds," said Morningstar Inc. analyst Eric Landry in his latest review of the company. "Unfortunately, though, it entered the current downturn with too much land and debt, a condition that may hinder its prosperity once demand picks up."

Yet Pulte's chief executive, Richard Dugas, during a conference call Thursday was cautious in his outlook for the U.S. housing market.

"For the home-building industry, the year 2007 will likely be remembered as one of the most difficult and challenging in decades," the CEO said. "Factors that signaled the beginning of this downturn such as high cancellation rates, elevated supply of for-sale homes both new and existing, and the tightening of mortgage availability simply worsened as the year progressed."

Pulte posted its first annual loss in the company's 58-year history.

"By the end of the year gross margins remained under pressure as the competition for home sales intensified during this market downturn," Dugas said. "Consumer confidence continues to be depressed, particularly with higher energy prices and the fear of a recession on the minds of many potential homebuyers."

He added: "The challenging market conditions that plagued 2007 will likely have a significant impact on 2008 as well."

Citing ongoing weakness in housing, Pulte forecast a first-quarter net loss from continuing operations in the range of 15 cents to 30 cents a share, not including additional impairments or land charges.

Pulte's strategy since the third quarter of 2007 has been mothballing communities rather than selling homes at a deep discount, according to Anna Torma at Soleil Securities Group. "Additionally, the company announced it would reduce pricing and use incentives only in select communities where closings would lead to positive cash-flow generation," the analyst said.

Dugas said on the conference call that the company has more than 50 communities that are mothballed.

"Obviously, it makes a heck of a lot more sense to put a community in mothball in this demand environment when we haven't put in a lot other than the acquisition of the land money into the ground," he said.

Pulte shares had lost nearly 60% over the past year heading into Thursday's session, but the stock was up 14% in afternoon trading as the home-builder sector rallied.

"With the expected loss in the first quarter and deteriorating order trends ... more impairment charges and book value erosion are likely to continue for the foreseeable future," said Paul Puryear at Raymond James & Associates. "The strong quarterly cash flow, though, could shore up any near-term liquidity concerns."

Analyst James Wilson at JMP Securities reiterated his market-perform rating on Pulte's stock. "Pulte has now impaired close to 25% of its peak inventory level, which is short of some that have gone over 30%, but we believe Pulte's heavy investment in Del Webb [active-adult retirement] communities, which have performed better than conventional housing, should limit the level of future impairments," he said.

Last week, home-builder bellwethers Lennar Corp. (LEN) and Ryland both reported quarterly losses.

Pulte Homes 4Q loss widens amid slowdown

2008-01-31T18:13:00.000-05:00

by Greg Bowden

DETROIT - Pulte Homes Inc. on Wednesday said its fourth-quarter loss widened dramatically as the housing market worsened.

In the three months ended Dec. 31, the home builders net loss expanded to $874.7 million, or $3.46 per share, from a loss of $8.4 million, or 3 cents per share, during the same period a year earlier. The report came after the close of trading Wednesday, when shares fell $1.28, or 8.6 percent, to $13.57.

The most recent quarter included $543.3 million of charges for inventory, land and goodwill impairment.

Analysts, on average, expected the company to report a loss of 50 cents per share according to Thomson Financial, although the range of estimates was broad because some estimates included expected charges while others did not.

Revenue for the Bloomfield Hills, Mich.-based company fell to $2.9 billion from $4.39 billion.

The earnings report comes two days after the Commerce Department reported that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the worst sales year on record, surpassing the old mark of a 23.1 percent plunge in 1980.

"The challenging market conditions that plagued the homebuilding industry for the first nine months of 2007 worsened in the fourth quarter," Pulte's president and chief executive, Richard J. Dugas Jr., said in a statement. "Levels of new and existing home inventory remain elevated, buyer demand for new homes continues to be weak, and mortgage availability is still a problem for many prospective homebuyers."

For the full year, the company posted a loss of $2.26 billion, or $8.94 per share, compared with a gain of $687.5 million, or $2.66 per share, in 2006. Revenue sank to $9.26 billion from $14.27 billion.

The company projected it will lose 15 cents to 30 cents per share in the first quarter, and said it expects to end 2008 with $2 billion to $2.2 billion in cash. Analysts expect a first-quarter loss of 41 cents per share.

Analyst Daniel Oppenheim of Banc of America Securities said in a research note that he expects the new homes sales rate to drop even more during parts of 2008. But he said a turnaround could be ahead.

"Better affordability, driven by lower home prices and mortgage rates, will likely help spur sales activity in coming months," Oppenheim wrote.

However, an analyst for The Motley Fool said it could be too early for investors to jump back into housing stocks.

"Homebuilders like Pulte Homes have seen renewed interest in their beaten-down stocks lately," Dave Mock wrote Wednesday. "But there's still an extensive supply of new homes that won't be picked up by consumer demand anytime soon. The purchasing power of the average American is expected to go into a prolonged decline."

The Federal Reserve issued a warning for the housing sector Wednesday as it made a half-point cut in its key interest rate to 3 percent.

"Credit has tightened further for some businesses and households," the Fed said. "Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets."

Report: Construction Defects Common in Pulte and Del Webb Homes

2008-01-30T20:09:00.000-05:00

By Greg Bowden

1/30/08

A report out today details construction defects in Pulte and Del Webb homes—and traces them to the poor working conditions of the major homebuilders’ low-wage workforce. Katrina Blomdahl, AFL-CIO Voice@Work communications specialist, has more here.

Homeowners in newly built Pulte homes are outraged about nearly every aspect of their homes, from faulty electrical wiring, to peeling paint, to bad air conditioners, according to a new study released at a press conference today at the Arizona State Capitol. John Smirk, business manager of Painters and Allied Trades of District (IUPAT) Council 15, said at the Capitol today:

We’re not surprised by the results of the survey. Workers on these jobs tell us they are dealing with unpaid wages and pressure to work through break times as well as a lack of drinking water and proper safety equipment.

The Building Justice campaign researched the report, “Poorly Built by Pulte,” after union organizers suspected poor working conditions likely would result in problematic homes. Their fears were confirmed when 59 percent of 411 surveyed homeowners cited defects in their homes.

The release of today’s report coincides with the launch of a new website, www.poorlybuiltbypulte.info. The site will enable Pulte and Del Webb homeowners to participate in an expanded survey, participate in forums, share photos, and post YouTube video links. Nevada Pulte and Del Webb homeowners will be the focus of a future report.

Pulte homeowner Terry Templeton, mother of seven, tearfully described her experience with Pulte:

The day after the Pulte superintendent called me to say there would be another delay in our home closing, I went out to visit our home site. Water had poured from a bad plumbing connection upstairs, flooded the house and the ceiling had collapsed.

Pulte had me convinced that I was the only one. It wasn’t until neighbors started coming to me for help and we started sharing stories that I realized we all had similar problems. Ironically, we were all being told the same thing—‘It’s not a defect, it will be taken care of, and you’re the only one with a problem.’ ”

Unfortunately, Templeton was not alone. The report is filled with accounts of dissatisfied homeowners. One homeowner from Chandler wrote in the survey:

Drywall, stucco, cracked patio, driveway, leaky pipes, etc. If this was a car I would get a new one under the Lemon Law. I have had nothing but problems. This house was worth $200, not $200,000.

Survey respondents also noted that model homes contained expensive upgrades and did not accurately reflect the homes they were sold. Matt O’Malley, lead researcher for the AFL-CIO working on the Building Justice campaign, sums up the situation this way.

Pulte points to its ranking as one of JD Power & Associates’ highest ranking homebuilders in terms of customer satisfaction—and its Del Webb brand ranked second for the Phoenix market in 2007. The results of our survey suggest that these awards overstate homeowners’ satisfaction with new Pulte homes.

Building Justice is a partnership comprised of IUPAT, the Sheet Metal Workers and the AFL-CIO.

I contacted the FBI

2008-01-30T19:01:00.000-05:00

I contacted the FBI in New York, Philadelphia, & Detroit Michigan previously about all of the criminal activity that involved Pulte Homes & it's employee's, the full blown investigation has started. Also there are 9 Pulte Executives that are involved in insider trading, I have contacted the SEC-Security Exchange, & the NYSE-New York Stock Exchange.

Pulte posts much wider fourth-quarter loss

2008-01-30T18:52:00.001-05:00

By Greg Bowden

1/30/08

NEW YORK (Reuters) - Pulte Homes Inc (PHM.N: Quote, Profile, Research), the No. 3 U.S. home builder, said on Wednesday its quarterly net loss widened sharply as a deteriorating housing market led to charges related to the lower value of land and inventory and a tax-loss benefit.

"The challenging market conditions that plagued the homebuilding industry for the first nine months of 2007 worsened in the fourth quarter," Richard Dugas Jr., Pulte's chief executive, said in a statement.

The fourth-quarter net loss increased to $874.7 million, or $3.46 per share, from $8.4 million, or 3 cents per share in the year-earlier quarter.

The U.S. housing market has been in a tailspin for more than two years, with top builders cutting prices and seeing orders dwindle.

Last year, builders slashed prices by the most since 1970 as sales of new U.S. single-family homes plummeted a record 26 percent, the U.S. Commerce Department reported Monday.

Sales in December alone fell 4.7 percent to an annual rate of 604,000, the slowest pace since 1995.

The latest Pulte results included a non-cash charge of $622 million, or $2.46 per share, to eliminate a tax loss-related asset on its balance sheet.

It also recorded charges of $543.3 million, or $1.28 per share, related to lower values of land, inventory and goodwill.

The loss from continuing operations was $893.3 million, or $3.54 per share, compared with a loss of $8.3 million, or 3 cents per share, for the prior year fourth quarter.

New home orders for the fourth quarter fell 29% to 4,562 from 6,446 last year, and Pulte Homes's backlog as of Dec. 31 of 7,890 homes was valued at $2.5 billion, down from $3.58 billion the previous year. Pulte Homes expects a first-quarter per-share loss from continuing operations of 15 cent to 30 cents.

Pulte Homes Expected to Take Big Charges, Could Report Quarterly Loss

2008-01-30T18:22:00.000-05:00

By Greg Bowden

NEW YORK (AP) -- Pulte Homes Inc. reports earnings Wednesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: The Bloomfield Hills, Mich., homebuilder is largely expected to report a loss in the fourth-quarter, hurt by charges to write down the value of unsold homes and forfeited land deposits.

From the start of 2006 through the third quarter, Pulte took $2.56 billion in such charges.

Data showed the housing slump worsened in the last three months of 2007, with sales slowing, prices falling and foreclosures rising. Homebuilders have had to cut prices to entice buyers, eating into operating margins. The builders have scaled back construction, trying to limit the supply of unsold homes, but a spike in foreclosures is undermining that effort.

BY THE NUMBERS: Analysts, on average, expect the company to report a loss of 50 cents per share, according to Thomson Financial. The estimates range from a loss of $2.10 per share to a profit of 14 cents per share.

The reason for the wide range is some estimates include expected charges while other do not.

ANALYST TAKE: Banc of America analyst Daniel Oppenheim expects the company to report a loss of 68 cents per share. His estimate includes a charge of $250 million related to land write-downs. He also expects the company to write off "a large portion" of its $800 million in deferred tax assets.

WHAT'S AHEAD: Pulte shares have risen recently along with the rest of the sector as investors seem to be thinking the stocks have reached a bottom. Most hit multiyear lows in late December and earlier this month.

Stocks typically start to move six to nine months ahead of the housing cycle -- meaning investors expect the start of a turnaround later this year. So far, no economist or homebuilder has issued a forecast that indicates they expect that.

STOCK PERFORMANCE: Pulte shares fell 23 percent in the quarter to finish December at $10.54.

U.S. Probes 14 Companies Including Pulte Homes In Subprime Investigation

2008-01-29T18:40:00.000-05:00

By Greg Bowden

WASHINGTON – Federal investigators have opened criminal inquiries into 14 companies including Pulte Homes as part of a wide-ranging investigation of the subprime mortgage crisis, focusing on accounting fraud, securitization of loans and insider trading, among other areas, the Federal Bureau of Investigation said.

The FBI is looking into allegations of fraud in various stages of mortgage securitization, from those who bundled the loans, to the banks that ended up holding them.

Pulte Homes Being Investigated By The FBI

2008-01-29T18:34:00.000-05:00

By Greg Bowden

It was announced on CNBC today that Pulte Homes will be investigated by the FBI for criminal activity.

I'm selling 5,000 Share's of PHM today

2008-01-28T15:40:00.000-05:00

By Greg Bowden

I just put 5,000 PHM shares on the auction block, and there are 4 to 5 million more to be added to that auction block, watch out, its going to get ugly tomorrow.