Beazer Reveals Big Losses, More Firings

Charlotte Observer (NC) (05/13/08); Hopkins, Stella M.
Beazer Homes USA remains under investigation by the FBI, HUD and the U.S. Securities and Exchange Commission for alleged violations of federal lending rules by its Beazer Mortgage unit. The company says there are several "areas of concern" with regard to its mortgage arm, including down-payment assistance, discount points, real estate agent bonuses and decorator allowances. The investigations were launched in response to a report by the Charlotte Observer of higher foreclosure rates in the company's developments in Charlotte, N.C., where Beazer offered incentives to buyers when it acted as a home seller but imposed above-market rate interest rates when it acted as a loan broker. The company initially said it expected to reach a settlement for $8 million to $15 million, but it recently said it could not estimate a settlement amount. Additionally, it has released its financial results for the year ended Sept. 30, reporting a $411 million loss, a nearly $612 million write-down of inventory and land options and a 35-percent drop in sales to $3.49 billion from the prior year. Beazer also fired numerous employees connected with the lending violations.