KB Home, Los Angeles, has made MetLife Home Loans its preferred mortgage lender, effective June 27. The homebuilder's previous mortgage joint venture relationship with Bank of America stopped accepting new loan applications as of June 26, although it will continue to process and close any applications it received.
KB Home revealed the change in its second fiscal quarter results release. It posted a $69 million loss for the period which ended on May 31, compared with a loss of $31 million one year prior. The current period loss includes $36 million in charges, including $15 million on a loan guaranty for its South Edge LLC residential development joint venture. The South Edge venture currently is in bankruptcy.
In a conference call, Jeffrey Mezger, president and chief executive of KB Home, said the marketing services agreement with MetLife allows his company to focus on its homebuilding operations.
A number of companies, including MetLife, have expressed an interest in forming a new mortgage joint venture with KB Home and the company is exploring its options, he said.
KB Home's equity interest in the B of A joint venture is included in the results under financial services operations, which had pretax income of $1.6 million vs. pretax income of $4.2 million one year prior.
The equity in income of the unconsolidated mortgage JV declined to $0.7 million in the quarter, down from $3.6 million one year prior, due to decreases in mortgage loan originations and profits per loan, the company's results release said.
