Federal review of Beazer loans
06/04/2009 12:19 PM
07/10/2009 5:25 PM
The Observer first reported in January 2006 on the high failure rate for Charlotte-area loans arranged by Beazer and insured by the Federal Housing Administration.
In response, the federal government reviewed a sample of loans arranged by Beazer's local office. This was completed in February 2006, but the Department of Housing and Urban Development, which administers the FHA program, refused to release its findings until last December.
The review found that Beazer in at least two cases had failed to document that borrowers could afford their mortgage loans, a violation of FHA rules. One of those borrowers has since foreclosed, and the other filed for bankruptcy to avoid foreclosure, the Observer found.
The review also found that Beazer charged at least five borrowers in the Charlotte area several times the maximum loan fees allowed on an FHA loan.
The review did not address how HUD allowed this to happen. And the affected borrowers were not notified.
HUD did request a response from Beazer. But two months after the report was completed, in April 2006, Beazer's Charlotte office surrendered its license to make FHA loans. HUD said the surrender was voluntary. Beazer declined to comment.
HUD says it will take no further action against Beazer. And the department said Beazer still can make FHA loans to Charlotte-area borrowers through a different lending office.
"We still want people to be served," HUD spokesman Lemar Wooley wrote in an e-mail to the Observer.
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