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Originally published Wednesday, April 7, 2010 at 10:06 AM

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Pulte says class action suit vs Centex dismissed

Homebuilder PulteGroup Inc. said Wednesday that a class-action suit that accused it of contributing to the subprime mortgage meltdown has been dismissed.

The Associated Press

BLOOMFIELD HILLS, Mich. —

Homebuilder PulteGroup Inc. said Wednesday that a class-action suit that accused it of contributing to the subprime mortgage meltdown has been dismissed.

The suit against its subsidiary Centex Homes was dismissed March 31, the company said. The U.S. District Court for the Central District of California also dismissed the class-action suits that the plaintiffs' law firm, McCuneWright LLP, had filed against seven other homebuilders, PulteGroup added.

McCuneWright LLP, based in Redlands, Calif., said in a statement that it will appeal the decisions.

The other class-action suits were against Lennar Homes, Ryland Homes, Standard Pacific Homes, D.R. Horton Homes, Beazer Homes, Shea Homes and Richmond American Homes.

When the cases were filed last year, the firm had alleged that the home builders knew there were likely to be foreclosures and a loss in value of the homes they sold.

The home builders sold houses using high-risk loans by "pressuring and enticing buyers" to use their own mortgage companies and appraisers, the firm said at the time. The allegations were based on research by the Laborers' International Union of North America.

The suits were on behalf of home buyers who put at least 20 percent down toward the purchase of a new home between 2004 and 2006.

PulteGroup said the court found that the plaintiff's claims of injury were the result of factors beyond the control of the homebuilders, such as rising unemployment and the general economic downturn.

The court dismissed the suits with prejudice, meaning plaintiffs cannot amend their original complaints.

PulteGroup has operations in 29 states and the District of Columbia. It bought Dallas-based rival Centex in August 2009 for $1.53 billion, creating the largest homebuilder in the United States.

PulteGroup shares slipped 28 cents, or 2.5 percent, to close at $10.88.

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