HomeLatest NewsFeatured HomebuildersHome Buyer ResourcesBinding ArbitrationResource LinksSubmit ComplaintsView ComplaintsTake Action 101!Report Mortgage FraudMortgage Fraud NewsForeclosure NewsConstruction DefectsHome DefectsPhoto GalleryFoundation ProblemsHomeowner Website LinksHOA Reform
Main Menu
Home
Latest News
Featured Homebuilders
Home Buyer Resources
Binding Arbitration
Resource Links
Submit Complaints
View Complaints
Take Action 101!
Report Mortgage Fraud
Mortgage Fraud News
Foreclosure News
Construction Defects
Home Defects
Photo Gallery
Foundation Problems
Homeowner Website Links
HOA Reform
Featured Topics
Builder Death Spiral
Report Mortgage Fraud
Foreclosure Special Report
Mold & New Home Guide
Special News Reports
Centex & Habitability
How Fast Can They Build Them?
TRCC Editorial
Texas TRCC Scandal
Texas Watch - Tell Lawmakers
TRCC Recommendations
Sandra Bullock
People's Lawyer
Prevent Nightmare Homes
Choice Homes
Smart Money
Weekly Update Message
HOBB Archives
About HOBB
Contact Us
Fair Use Notice
Legislative Work
Your House

 HOBB News Alerts
and Updates

Click Here to Subscribe

Support HOBB - Become a Sustaining Member
Who's Online
We have 1 guest online
ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration

Organizing your community to bring public attention to builder’s bad deeds and seeking assistance from local, state and federal elected officials has proven to be more effective and much quicker for thousands of families. You do have choices and alternatives.  Janet Ahmad

Beazer Admits to Mortgage Fraud
Thursday, 18 October 2007

Beazer Homes faces up to $15M fine for loan violations
Beazer Homes (BZK) said Thursday that some employees at its mortgage division broke federal loan laws from at least 2000 through early this year. The builder said it expects to pay up to $15 million in regulatory fines and losses and to restate its financial results all the way back to 1999.The Atlanta-based company, one of the nation's largest home builders, also said roughly two of every three buyers canceled their contracts from July to September.Beazer is being investigated by the Securities and Exchange Commission and the U.S. Attorney's office in North Carolina on allegations that it broke rules governing down payment assistance, sold homes to low-income buyers who couldn't afford them, falsified documents and charged higher fees than the regulations allow.

Beazer Homes faces up to $15M fine for loan violations

By Noelle Knox, USA TODAY
Beazer Homes (BZK) said Thursday that some employees at its mortgage division broke federal loan laws from at least 2000 through early this year. The builder said it expects to pay up to $15 million in regulatory fines and losses and to restate its financial results all the way back to 1999.

The Atlanta-based company, one of the nation's largest home builders, also said roughly two of every three buyers canceled their contracts from July to September.

Beazer is being investigated by the Securities and Exchange Commission and the U.S. Attorney's office in North Carolina on allegations that it broke rules governing down payment assistance, sold homes to low-income buyers who couldn't afford them, falsified documents and charged higher fees than the regulations allow.

In one of Beazer's subdivisions in Concord, N.C., nearly one in five homes has fallen into foreclosure, according to an analysis by The Charlotte Observer.

In Beazer's internal investigation, forensic auditors found that employees at its mortgage unit violated rules on down payment assistance for loans insured by the Federal Housing Administration.

FIND MORE STORIES IN: Thursday | Atlanta | Beazer Homes

Beazer, which has yet to reach a settlement with regulators, said its liability will be affected by "the percentage of such loans in which misrepresentations or fraud may have occurred, and the default rate, principal loan amount and losses associated with such loans."

Nationally, about 65% of people who buy a home from Beazer receive financing from its mortgage arm. But only a small fraction of buyers used FHA loans.

Wall Street investors appeared relieved by the company's estimate of fines and losses. Beazer's stock rose 20 cents to $10.13.

"It was dramatically lower, by a factor of 10 at least, than some of the numbers I had heard people kicking around," says Stephen Kim, an analyst at Citibank.

The estimate, Kim says, "seems to imply the number of violations had to be very small. It certainly did not appear to be epidemic."

The internal inquiry, though, is ongoing, and Beazer is still facing civil lawsuits from home buyers.

Beazer also has received a letter of default from bondholders, who have lent the company $1.5 billion in long-term debt, because Beazer still hasn't filed its financial statements for the quarter that ended in June. The company has asked a federal judge in Atlanta to stop the bondholders from demanding immediate repayment.

Thursday's statement "is good in that we have somewhat more clarity now — some rough numbers we can get our hands around," says Robert Curran, an analyst at Fitch Ratings. "But there is still more yet to be determined."

Beazer also said it will restate its results for last year and part of this year because of the inappropriate way it accounted for model homes it sold to buyers and then leased back. Correcting those issues will reduce Beazer's fiscal 2006 pretax income by about $20 million.

http://www.usatoday.com/money/economy/housing/2007-10-11-beazer-homes_N.htm

 
< Prev   Next >
Search HOBB.org

Reckless Endangerment
BY: GRETCHEN MORGENSON
and JOSHUA ROSNER

Outsized Ambition, Greed and
Corruption Led to
Economic Armageddon


Amazon
Barnes & Noble

NPR Special Report
Part I Listen Now
Perry Home - No Warranty 
Part II Listen Now
Texas Favors Builders

Washington Post
The housing bubble, in four chapters
BusinessWeek Special Reports
Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Consumer Affairs Builder Complaints

IS YOUR STATE NEXT?
As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

OUTSTANDING FOX4 REPORT
TRCC from Bad to Worse
Case of the Crooked House

TRCC AN ARRESTING EXPERIENCE
The Pat and Bob Egert Building & TRCC Experience 

Build it right the first time
An interview with Janet Ahmad

Bad Binding Arbitration Experience?
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
or call 1-210-402-6800

Homeowner Websites

top of page

© 2024 HomeOwners for Better Building
Joomla! is Free Software released under the GNU/GPL License.