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Posted: Tuesday, Jun. 09, 2009

Beazer says it followed the law

Published in: 'Nightmare' archive

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In a written statement, Beazer Homes USA acknowledged the foreclosure rate in Southern Chase is relatively high.

The company, based in Atlanta, said some foreclosures were normal in a starter-home neighborhood, and some foreclosures resulted from economic difficulties experienced by buyers. It said some residents were employed in the textile and tobacco industries, which cut workers in recent years.

Beazer, which ranks among the nation's 10 largest home builders, said its practices in Southern Chase were in line with industry standards, including arranging loans for most buyers and offering financial incentives.

The company in 1996 created a subsidiary, Beazer Mortgage, to act as a mortgage broker for buyers in its subdivisions.

The statement emphasized that Beazer does not make final approval decisions about the loans it arranges. Those decisions are made by the company that provides the money. In Southern Chase, two-thirds of the loans arranged by Beazer were approved and funded by National City Corp. of Ohio.

Beazer said its mortgage subsidiary complied with the law and that its operations were carefully monitored. It also said customers were informed of loan terms, and they signed documents indicating understanding and acceptance of features such as an interest-rate buydown or down payment gift.

Beazer's chief executive, Ian McCarthy, declined to speak with the Observer. McCarthy took the company public in 1994 and remains in charge. His focus on starter homes has been lucrative. The company made $389 million last year. Its stock price has increased fivefold over the last decade. In 2005, Beazer cracked the Fortune 500.

The company entered the Charlotte market in 1987 with the purchase of Squires Homes. Beazer ranked among the largest builders in the Charlotte area over the last decade. The company is currently building in 14 local subdivisions. It plans a development near Bank of America Stadium, where the Coffee Cup restaurant stands.

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