A Charlotte, North Carolina FBI agent stated that the FBI and the US Attorney's Office, along with the Internal Revenue Service and HUD launched an investigation of Beazer Homes after the Charlotte Observer reported that there was an abnormally high foreclosure rate in one of their new home developments in North Carolina. Seventy-seven homes went into foreclosure in the in the Southern Chase subdivision of 406 new homes.
Beazer Homes acknowledged that the company was under investigation and has released two statements. In the first, the company states, "The allegations by the Charlotte Observer focused primarily on one Charlotte subdivision, Southern Chase. In that subdivision, Beazer Mortgage Corporation originated the loans for the borrowers and served as a broker, not a lender. We were involved on the front end of the loan transaction process, compiling the necessary information, which we then submitted to the lender for underwriting review. The ultimate underwriting decision for the loan rested with the lender. "
"Based on our internal investigations to date, we have not found any evidence to support the allegations in the Charlotte Observer."
In the second statement the company let it be known that, "Beazer Homes has been in contact with the U.S. Attorney's Office and, at this time, there have been no allegations of any wrongdoing. Instead, Beazer Homes has received a request for documents generally relating to its mortgage business." They further stated that, "We have further been told by the U.S. Attorney's Office that the statements by the FBI and published by Business Week were not authorized and should not have been made."
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.