Hunterbrook Media has published an investigation into LGI Homes, Inc. ($LGIH), alleging the company employs predatory sales practices aimed at low-income and first-time homebuyers. The report cites a 261-page internal sales manual and statements from multiple former employees.
According to the investigation, the manual trains sales agents to pressure customers, provide unlicensed mortgage advice, and steer buyers toward LGI's affiliated lender. Former employees confirmed agents were instructed to misrepresent terms and create false urgency to secure sales.
The manual reportedly details activities such as prequalifying buyers, pulling credit reports, counseling on mortgages, and even suggesting risky credit cards to improve scores. These actions generally require licensing under state and federal laws, including the SAFE Act.
Employees described a workplace culture involving coercion and psychological tactics. Practices included placing misleading "Sold" signs on properties, making orchestrated claims of scarcity, and steering renters toward home purchases. These methods reportedly inflated the company's net order numbers.
LGI Homes' cancellation rate was approximately 36% in the third quarter of 2025, a figure far exceeding rates reported by competitors like D.R. Horton and Lennar. Former agents also described a toxic internal environment with intense competition and pressure to ignore ethical concerns.
The impact on consumers has been significant. Foreclosure rates among LGI buyers are reportedly four times the national average. Some experts warn that the unlicensed mortgage activity and manipulative sales tactics resemble behaviors that contributed to the 2008 financial crisis.
LGI Homes, Inc.'s share price was $53.79 as of January 13th. Its trailing and forward P/E ratios were 11.90 and 11.92 respectively, according to Yahoo Finance data. The company has not responded to detailed requests for comment on the allegations.
The investigation suggests potential violations of consumer protection, mortgage licensing, and privacy laws. Regulators, industry observers, and affected homebuyers are now considering the consequences of these alleged sales strategies.