Pulte Homes Inc. and KB Home are among six builders that agreed to pay a total of $1.4 million to settle federal investigations into whether they accepted rebates from insurers for referrals when selling homes.
The kickback investigations, ended as part of the settlements, are among hundreds being conducted by states, including California, and the U.S. Department of Housing and Urban Development into payments by title insurers. State regulators found that the referral payments to real estate agents, developers, lenders and builders led to higher closing costs for consumers.
Pulte, the third-largest U.S. home builder by revenue, and KB Home, the fifth-biggest, agreed to pay $466,000 and $456,000, respectively, to settle the probes without admitting wrongdoing, the federal housing agency said Monday.
The top five U.S. home builders have written down land and recorded other charges totaling $5 billion in their most recent quarters and have reported a total net loss of $2.8 billion. New-home sales are projected to fall to the lowest pace since 1997.