Business

Beazer Homes leaving Charlotte, Columbia, dropping mortgage business

CHARLOTTE -- Beazer Homes USA, a homebuilder under federal investigation, said today it will exit the Charlotte and Columbia markets and three others, and it also will stop making mortgages, a business in which it has said employees violated federal housing regulations.

The Atlanta company gave no timetable for the withdrawal, which has been rumored among its area homebuyers for several weeks. Model houses already have been listed for sale with Allen Tate. Beazer homebuyers in two projects say model homes are being set up for sale.

Beazer said in a statement that it would complete all homes under construction and continue providing warranty services to customers.

The company also said it will sell land it owns in the five markets where it is leaving, which include Lexington, Ky., and Cincinnati, Columbus and Dayton in Ohio. As of June 30, the company said those markets represented about 5 percent of its homebuilding assets.

Beazer's decision to exit leaves some Charlotte-area subdivisions incomplete. Recent homebuyers in those projects and neighboring areas have been worried about what would become of the empty lots and undeveloped areas. That likely won't be resolved until Beazer finds buyers.

The company also said it has paired with Countrywide Financial to offer mortgages. Countrywide, the nation's largest mortgage lender, has become the poster child of the U.S. mortgage crisis, prompted by lending to people with questionable credit and enabling people to buy houses they couldn't afford. Charlotte's Bank of America is in the midst of buying the troubled lender.

Beazer's departure comes amid a severe national housing slump. The Charlotte area has fared somewhat better than many markets but lately has shown signs of further deterioration.

Beazer also is contending with problems uncovered in an Observer investigation last year.

The Observer found an unusually high number of foreclosures in Beazer-built neighborhoods in the Charlotte area, that the company arranged larger loans than some buyers could afford and violated federal lending rules.

The Observer documented four instances of loans arranged by Beazer that were approved based on misstated information about applicants' income and debts. Knowingly falsifying information on a loan application is a federal crime.

As a result, the company is the subject of a federal criminal investigation and a formal inquiry by the Securities and Exchange Commission.

In a sign that Beazer plans to continue business, the company said it was entering the north Florida market. Beazer also did not say it was exiting the Greensboro and Raleigh, N.C., markets.

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