CNBC's Olick Tackles 'Homebuilder Extortion' Debate

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

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.