Thursday Morning: Burned by Falling Prices in the Desert, Homeowners Sue Centex

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Here’s a new one: investors who bought upscale townhomes and villas in La Quinta -- where prices are now falling -- are suing the builder, alleging securities fraud.

From the Desert Sun: 44 investors who purchased properties in Legacy Villas at La Quinta are suing Centex Homes, asking for a cancellation of their purchase agreements to recoup $20 million to $25 million.

Falling prices: ‘Some investors who purchased in the first phases claim they can’t refinance now because property values have plummeted. Villas that once sold for $775,000 have recently been selling for about $555,000.’

More: ‘The suit alleges Centex marketed homes with promises that investors would reap profits under a rental agreement managed by La Quinta Resort & Club. But because of construction delays and a long list of other ‘misrepresentations’ and problems, investors claim they were stuck with charming Spanish-style villas that they weren’t able to rent out.’

Eric Bruner, a spokesman for Dallas-based Centex Corp., said, ‘We are not going to discuss any matter under litigation.’

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