- The Washington Times - Tuesday, March 27, 2007

From combined dispatches

ATLANTA — Beazer Homes USA Inc., which recently has experienced hefty losses with a downturn in the housing market, now faces a federal investigation of mortgage fraud and other claims involving the home builder. Beazer shares plunged in after-hours trading yesterday.

The FBI and the U.S. Attorney’s Office in Charlotte, N.C., along with the Internal Revenue Service and the U.S. Department of Housing and Urban Development, began an investigation of Beazer Homes last week, FBI Agent Ken Lucas said yesterday.

Mr. Lucas, a spokesman for the FBI’s Charlotte field office, said the inquiry involves “fraud in general” and more specifically is related to corporate, mortgage and investment issues.

The move came as Sheila Bair, chairman of the Federal Deposit Insurance Corp., urged Congress to set uniform national standards for all lenders, to protect consumers against abusive mortgage lending tactics.

Currently mortgage companies are subject to a patchwork of federal and state regulation that is mostly aimed at banks rather than the majority of lenders and brokers who are not affiliated with banks.

The widespread problem with subprime mortgages suggests the country needs “a comprehensive response that assures that all lenders are subject to certain baseline requirements,” Mrs. Bair said at a House Financial Services Committee hearing. “A national anti-predatory-lending standard would help assure basic uniform protections for all borrowers.”

“The impact of mortgage delinquency and foreclosure on consumers and communities is one of great concern,” said Sandra Braunstein, director of the Fed’s Division of Consumer and Community Affairs, “We have much work ahead of us, as there is no one sure and easy fix.”

In the Beazer investigation, Mr. Lucas said he wasn’t sure whether investigators would seek to question corporate officers and subpoena company records.

“We just started this,” he said.

Mr. Lucas declined to release more details about the investigation. He also would not say what prompted the inquiry.

In a prepared statement, Beazer said it “can not comment on or verify any investigation. However, we will fully cooperate with any investigation by any government agency.”

“Beazer Homes has a long established commitment to managing and conducting business in an honest, ethical and lawful manner,” the statement said.

Beazer shares dropped $4.42, or 14.1 percent, to $26.99 in aftermarket electronic trading, after closing down 91 cents, or 2.8 percent, at $31.41 on the New York Stock Exchange.

Last week, Beazer Homes said that its chief financial officer, James O’Leary, was stepping down after four years with the home builder to become president and chief executive officer of Kaydon Corp.

Beazer has suffered from the housing downturn. Weak demand for new homes, sales at steep discounts and the need for inventory write-downs have taken a toll on the company’s results.

Losses for the first quarter ended Dec. 31 totaled $59 million, compared with a profit of $89.9 million in the same period a year earlier, while revenue slid to $806.4 million from $1.1 billion in the year-ago period.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide