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CNBC's Olick Tackles 'Homebuilder Extortion' Debate

Diana Olick
Monday, 9 Apr 2007 | 6:11 PM ET

Some call it "homebuilder extortion" but companies such as Lennar say they're simply trying to cut costs in a struggling housing market.

Realty Check: Homebuilder Extortion?
Lennar is telling contractors who've already completed work to lower their bills or face the possibility of being cut out of future contracts. Diana Olick, CNBC real estate reporter, has the story.

Lennar, the sixth largest U.S. homebuilder, has asked some contractors to reduce bills by 20% or face exclusion from bidding jobs, CNBC's Diana Olick reported.

In a letter sent to building contractors, the company outlined two options, Olick said: Reduce unpaid invoices 20% for work already completed, or keep costs unchanged and be prohibited from bidding on future work for a minimum of six months.

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