Is KB Home's mortgage partner, BofA, getting cold feet?
KB Home (KB) fears the joint venture it built with Bank of America (BAC) is on shaky ground, according to securities filings. The company said BofA came forward suggesting a restructuring of the parties' joint venture. Over the course of the past several years, the joint venture allowed the firms to provide homebuyers with mortgage and banking services. KB Home said in regulatory filings that "while there are a number of possible outcomes from these discussions, the mortgage banking joint venture continues to operate and the company will remain focused on ensuring that its homebuyers obtain reliable mortgage banking services." KB CEO Jeff Mezger told analysts this week that "KB Home was informally advised by Bank of America that they want to strategically move away from operating under joint venture structures in their business. Recognizing that we still have over nine years remaining on our joint venture contract, we are working with them to see if we can restructure our relationship in a manner that is beneficial to both parties." KB Home saw its revenue plummet 25% and its net loss deepen in the first quarter as the builder faced headwinds from the elimination of a federal homebuyer tax credit and a drop in demand. The Los Angeles-based homebuilder posted a net loss of $114.5 million, or $1.49 per share, for the first quarter ending Feb. 28. Write to Kerri Panchuk.