MORTGAGE LOAN COMPLIANCE®

U.S. Homebuilder Beazer Homes USA Inc. has agreed to pay $5 million to the U.S., plus contingent payments of up to $48 million to be shared with victimized homeowners, to resolve allegations that it and Beazer Mortgage Corp. were involved in fraudulent mortgage origination activities in connection with federally insured mortgages.

The settlement puts the following allegations to rest:

· Beazer Homes ignored stated income requirements in making loans to unqualified purchasers;

· Beazer Mortgage Corp. made Federal Housing Administration-insured mortgage loans for homes built by Beazer Homes, the companies fraudulently and improperly required purchasers to pay interest discount points at closing but then kept the cash and failed to reduce interest rates;

· Beazer Homes provided cash gifts to home purchasers through certain charities so purchasers could come up with minimum required down payments, with assurances the gifts would not have to be repaid, and then increased home purchase prices to offset the amount of the gifts;

· Beazer Homes obscured which of its branches made defaulting loans to avoid FHA detection of excessive default rates.

Currently Beazer Homes operates in at least 21 states.