KB Home Starts Joint Venture with Nationstar
KB Home has taken its relationship with Nationstar Mortgage to the next level, forming a joint venture mortgage banker company to be called Home Community Mortgage LLC.
It entered into a preferred lender arrangement with Nationstar in March 2012 after getting burned by two other mortgage bankers. First, in April 2011, the Los Angeles-based homebuilder said Bank of America, its partner in a mortgage banking joint venture, approached it during its first fiscal quarter asking to restructure their relationship.
However, those talks ended up being fruitless, and on June 26, 2011 the joint venture was shut down and the next day MetLife Home Loans became its preferred lender.
That fizzled very quickly as MetLife was unable to mobilize its operations in the markets where KB built new homes in a timely fashion.
Out of that, the preferred lender relationship with Nationstar was born.
Said Jeffrey Mezger, president and chief executive of KB Home, “A quality, predictable mortgage process is an essential element of our Built to Order business model, and Nationstar’s performance as KB Home’s preferred mortgage lender has already resulted in more consistent execution.”
A spokeswoman for KB Home said it was always the company’s strategic intent to form a joint venture entity like Home Community.
Nationstar began taking applications on May 1, 2012 and it’s very happy with the alliance with them because of the increased customer satisfaction on the part of homebuyers.
She added that Nationstar has offices in proximity near the homebuilder’s sales offices and those offices will become Home Community offices.
KB Home is not disclosing how the entities are splitting their ownership percentage in Home Community, she said.
In December, the company said 61% of its deliveries in the most recent quarter were purchased by first-timers. But at the time Metzger was quoted as saying because of tight credit conditions it was concentrating on upper-tier first-time buyers.