|The parent company of a mortgage lender that shut down last year will pay $2.5 million to settle a lending investigation by North Carolina regulators. But a federal investigation into mortgage fraud on government originations lingers.
In an announcement today, Beazer Homes USA Inc. said it entered a settlement agreement with the North Carolina Office of the Commissioner of Banks over "certain mortgage origination issues in 2007."
Subsidiary Beazer Mortgage Corp., which shut down in February 2008, was subpoenaed by the U.S. Attorney's Office in the Western District of North Carolina in March 2007. The subpoena, issued at the request of the Department of Housing and Urban Development's Office of Inspector General, sought mortgage origination documents on homes in at least one North Carolina subdivision.
Potential fraudulent lending practices involving FHA-insured loans with high foreclosures rates were being investigated.
In October 2007, Beazer disclosed that provisions of HUD's down payment assistance regulations were violated on FHA-insured loans by its employees. The violations dated back to 2000.
Today's settlement includes a consent order for Beazer Mortgage to provide $2.5 million in restitution to borrowers impacted by alleged violations at the unit.
"The settlement agreement concludes the Office of the Commissioner of Banks' investigation into these matters with respect to Beazer Mortgage," the statement said.
But no agreement has yet been reached with the U.S. attorney's office.
In all, Beazer said it has set aside $13 million in charges for payments tied to government investigations.