The Arizona Republic is reporting Firm is failing to pay its carpenters. A closer...

The Arizona Republic is reporting Firm is failing to pay its carpenters. A closer look at the article shows that subcontractors are not paying workers because the subs are not being paid by the homebuilders. Let's take a look: BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? . A closer look at the article shows that subcontractors are not paying workers because the subs are not being paid by the homebuilders. Let's take a look: More than 100 workers at a Scottsdale construction framing company haven't been paid in several weeks, and that has Latino community advocates concerned that some employers are taking advantage of workers. Veemac Framing Corp., a subcontractor for some of the Valley's top home builders, acknowledged that it has not paid the workers, who are owed three to five weeks of back pay. Company officials blamed a financial dispute with two home builders and a third company that is hindering its cash flow. Veemac said it would pay the workers as soon as the dispute is worked out. 'We don't want to see this become contagious,' said Alfredo Gutierrez, a talk show host at Radio Campesina and former state legislator, who has taken up the workers' cause. 'If you're in business, you're in business. Your first obligation is to pay your workers.' The attorney, Greg Eagleburger, said the company plans to pay the workers as soon as it negotiates payment from two of its customers, 'It's only a delay,' he said. 'As soon as we are paid by our customers, we will continue to pay our workers, who we feel are the best.' 'We worked for promises,' said Arturo Botello, a foreman who said he is owed five weeks of back pay. 'They kept telling us they would pay us, so we kept showing up.' Others said they were unsure whether they would continue working, although most said they had stopped working for the company two weeks ago. Under state law, employers are required to pay employees at least twice a month. But the State Labor Department has no ability to levy penalties if employers don't comply. It can only refer cases to prosecuting agencies. Well how about that? It seems a subsidiary of Lennar is not paying its bills. If this is a quality or performance issue then it reflects on the quality of Lennar homes. On the other hand if this is a cash flow issue it speaks for bigger issues with the homebuilder itself. Without knowing how U. S. Home is structured it is entirely possible that Lennar is financially sheltered from responsibility but if they play that card, what would it say for the integrity of Lennar? With all of Lennar's other problems, including MDC, whose subsidiaries build homes under the name 'Richmond American Homes,' is one of the largest homebuilders in the United States. The Company also provides mortgage financing, primarily for MDC's homebuyers, through its wholly owned subsidiary HomeAmerican Mortgage Corporation. MDC is a major regional homebuilder with a significant presence in some of the country's best housing markets. The Company is the largest homebuilder in Colorado among the top five homebuilders in Northern Virginia, suburban Maryland, Jacksonville, Phoenix, Tucson, Las Vegas and Salt Lake City and among the top ten homebuilders in Northern California and Southern California. MDC also has established operating divisions in West Florida, Philadelphia/Delaware Valley, Chicago, Dallas/Fort Worth and Houston. Looking at that profile we see Richmond American Homes is the largest homebuilder is the biggest homebuilder in the state with the most foreclosures (Colorado), and we see extensive operations in many other bubble areas. 1100am KFNX News Talk Radio tomorrow at 6:00 AM (Pacific Time)to talk about various nonpayment issues such as this one, as well as will be on CNBC this Thursday evening at 8:00 PM Eastern to discuss housing in Florida. It seems things are starting to get quite interesting. The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.