2009 Investigations and Litigation
On July 1, 2009, Beazer Homes USA, Inc reaches $50,000,000 settlement of Mortgage and Accounting Fraud with United States.
Under the deferred prosecution agreement, Beazer agrees to pay $10,000,000 immediately toward restitution for victimized home-buyers, and additional money as Beazer recovers financially, up to $50,000,000 million. This $10,000,000 includes the $2,500,000 Beazer paid to the North Carolina Commissioner of Banks in May 2009 to provide restitution to North Carolina victim home-buyers, and the remaining $7,500,000 will be paid into a national restitution fund. Any additional payments, up to $50,000,000, will be paid into the national restitution fund. Any monies in the national restitution fund that are unclaimed by victimized home-buyers after the expiration of the agreement will revert to the Federal Housing Administration, subject to the terms and limitations in a separate civil agreement between Beazer and the Civil Division of the U.S. Department of Justice and the U.S. Department of Housing and Urban Development.
As described more fully in the bill of information, Beazer and its subsidiary, Beazer Mortgage Corporation, admit to engaging in several fraudulent mortgage origination practices, including (1) fraudulently retaining so-called “discount points” that should have been used to provide some home-buyers with a decreased interest rate; (2) fraudulently informing some home-buyers that they were receiving a “gift” from a charity to cover their down-payment when, in truth, the price of the home was increased to offset the supposed “gift;” (3) fraudulently circumventing the “Neighborhood Watch” and “Credit Watch” programs of the Department of Housing and Urban Development to avoid action from HUD in response to the high foreclosure rate of some Beazer Mortgage offices; and (4) instituting a strategy of willful blindness with regard to some stated income loans.
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