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To: Dale Baker who wrote (46590)	6/3/2006 1:21:53 PM
From: Carl Worth	Respond to of 118717

as i noted, HOV themselves said they walked away from 5.6M in land options in the last quarter, where they couldn't renegotiate the options to a level they felt was reasonable 1M to a HB is like 12 cents to you or me "As many of our housing markets have continued to cool off from the white- hot levels of previous years, we have renegotiated option contracts on numerous land parcels - primarily those negotiated within the last twelve months that no longer adequately reflect the pricing and returns available in the current sales environment," Mr. Hovnanian said. "We also walked away from about $5.6 million of deposits on land parcels that we controlled through options when we were unable to successfully renegotiate the purchase terms. This amount was charged off and reflected in our second quarter earnings, impacting net results by $0.05 per fully diluted common share. For years, we have employed a strategy of controlling land predominantly with options to allow us to efficiently manage inventories under changing market conditions. Our disciplined approach allows us to achieve the best possible returns commensurate with prudent risk for the Company and our shareholders," Mr. Hovnanian concluded.