Beazer Homes Agrees to Settle With Feds for $55M
July 8, 2009
A little over two years ago a news story broke out of The Charlotte Observer’s investigation The Prisoner movie
Meet the Robinsons movie full into why the foreclosure rate among certain Beazer Homes built neighborhoods in North Carolina was around 20% versus the national average of 3%.
The story continues by detailing how Beazer Homes’ mortgage division allegedly used FHA loans with falsified applications to get buyers into homes they couldn’t afford. Fast forward two years later and Beazer Homes finds itself with a new $55 million dollar tab to pay with $50M of it to go to restitution for homeowners that suffered/went into foreclosure because they were unable to afford their new home. The remaining $5M is due to hit HUD to help resolve their investigations into the possible predatory lending and loan fraud. In addition to the financial settlement, Beazer’s Mortgage arm has been greeted by the Reaper and several executives fired.
Towards the end of Builder Magazine’s article on Beazer’s settlement
with the government they mentioned how many government agencies and offices were involved in the investigation: Over seven in total including HUD, the FBI and the North Carolina Real Estate Commission.
Though five of the agencies/offices issued stern statements declaring the settlement a win for wronged consumers, I’m left wondering if they set the right precedent by merely accepting the settlement and throwing the potential criminal activities to the wayside. The running joke about Corporate America is that if you have enough money you can buy your way out of anything. Did the U.S. Government prove that with their acceptance of this settlement?
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