‘America’s Builder’ Fattens Itself from the Foreclosure Crisis

Share this:

Tweet

Julie Parker

Julie Parker was born in March 19, 1983, in Lancaster – Los Angeles County, California. Her father is an experienced economist and businessman, who motivate her taste for the real estate market. Recently, graduated in Economics and now focus her studies in a PhD. Now she’s a consultant and webwritter of ForeclosureListings.com

The company named American Builder has continued to fatten itself even during the foreclosure crisis. It had started putting on weight during the time of the housing bubble. D.R. Horton, the captain of the company together with his crew spread out across the country, opened new branches and swallowed up lesser fry coming their way as they went into a frenzy of acquiring and expanding.

The housing sector reached its peak during 2006 when Horton sold 53,099 houses. The captain predicted that by 2010 it would cross the magic figure of 100,000. But it is obvious that this will not take place either this year or in the near future. In 2009 Horton managed to sell 16,703 units. From the time of the bust that started from 2007, the firm has endured losses worth over $3.9 billion. 53% of its workers have lost their jobs.
Ironically in one section Horton has maintained growth – the pay of executives. D.R. Horton pocketed $17.6 million from the time of the start of the bust in 2007 till 2009. His yearly bonus shot up to $7.6 million from $2 million according to a firm named Equilar that focuses on salaries. The CEO of the firm Donald Tomnitz also gained from the same type of increase. Both are well set to see salary hikes each year.

The same story of the top brass in the building industry benefiting disproportionately while others languished has been repeated with other firms. The industry as a whole retrenched half of its working strength and lost over half their capital in the market.

Ironically while the brokers of Wall Street have been subjected to far more investigation and pain for their fat purses, the executives of the house builders have been doing very well. During the two consecutive years of 2007 and 2008 the CEO’s of the top ranking homebuilders in the country earned approximately 6 million annually – the amount being the total of their bonuses and compensation.

The banking sector and the automobile manufacturers got fatter bailout from the administration the homebuilders too were not denied their share. It came as tax benefits for the purchasers, tax refunds for the developers and policies followed by the government that kept the mortgage rates on a low key. It also kept foreclosed units off the shop shelves for long stretches of time.