The lawsuit charges the homebuilder with violating the Real Estate Settlement Procedures Act, according to a filing with the Securities and Exchange Commission.
The complaint, filed in U.S. District Court, Southern District of Georgia, says the homebuilder required that home buyers use Horton’s affiliated mortgage company in order to get discounts and incentives.
Perhaps D.R. Horton should turn to this article by John Rosevear at Motley Fool for their defense:
But when a builder offers a $99,000 discount on a newly built home, are you really buying a $300,000 home for $201,000? Or are you paying $201,000 for a home that’s really a $190,000 home spiffed up with marketing smoke and mirrors? In order to understand if you’re really getting a discount, you need to have some idea of what the home’s fair value is in the current market. Odds are, you’re not getting as big a bargain as the advertising implies — and you may be getting no bargain at all.
I can picture the courtroom drama:
Plaintiff: Your Honor, D.R. Horton forced me to use their lender in order to get the big discounts.
Defense: Nonsense your Honor. If you look at the terms of our financing, you’ll see that borrowers that used our lender financing didn’t really get a better deal than anyone else!
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