Beazer Homes probed

25 March 2008

The US Attorney's Office is examining documents supplied to it by Beazer Homes, relating to the company's mortgage business. Two class action lawsuits have also reportedly been filed against Beazer, relating to alleged irregularities in its mortgage business.

It appears that Beazer, which is the sixth largest house builder in the US by revenues, is under investigation for suspected improper practices in its mortgage brokering business, Beazer Mortgage Corporation. One of the class action suits has been launched on behalf of purchasers of Beazer shares between July 27, 2006 and late March 27 this year, alleging the company and certain of its directors failed to disclose improper lending practices by its mortgage business.

The second suit has been launched on behalf of a class of individuals who bought Beazer-built homes in North Carolina, where it is alleged the company used unfair practices to allow low income purchasers to buy houses they could not afford. This, the suit says, has lead to a foreclosure rate that is significantly higher than the state-wide average.

A company statement said, “Beazer Homes believes that the lawsuit is without merit and intends to vigorously defend itself.”

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