Builder Beazer Homes to Settle Mortgage Fraud Case for $53 Million

2009 July 2

July 2 2009 - Beazer Homes USA Inc. agreed to pay as much as $53 million to the government and homeowners to resolve allegations of mortgage fraud, the Justice Department said.

When Beazer’s mortgage unit made federally insured loans for the purchase of homes built by Beazer, they improperly required purchasers to pay discount points and failed to reduce interest rates, the department said in a statement today. Beazer also allegedly provided cash gifts to home purchasers through charities to help customers make down payments, and ignored income requirements in making loans.

Unqualified home buyers obtained federally insured mortgages and interest rates for the loans were inflated, according to the Justice Department. Some of the mortgages that resulted from the fraud defaulted and the Federal Housing Administration was “wrongfully required to pay inflated claims” and to pay for managing and marketing the properties.

“Mortgage fraud is a top priority for this administration, especially when public dollars are at stake,” Assistant Attorney General Tony West, who heads the Justice Department’s Civil Division, said in a statement. “We will aggressively pursue fraud on federal mortgage insurance programs.”

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