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Beazer Gets Grand Jury Subpoena In Probe of Mortgage Business

Beazer Homes USA said it has received a grand jury subpoena from the U.S. Attorney's Office, which is seeking documents relating to it mortgage origination business.

In a filing with the Securities and Exchange Commission, the sixth-largest U.S. home builder said the subpoena from the U.S. Attorney's Office in the Western District of North Carolina was issued upon application of the Office of Housing and Urban Development, Office of Inspector General.

Beazer's shares have fallen sharply recently on news of the probe.

The sixth-largest U.S. home builder said it has been in contact with the U.S. Attorney's Office and is cooperating with the investigation.

Earlier this week, a representative at the FBI office in Charlotte, N.C., said the agency was "conducting a potential fraud investigation" into Beazer, which builds houses for many first-time buyers.

Atlanta-based Beazer said it has not received a request for information or documents from the FBI or Internal Revenue Service in this regard.

Beazer earlier said that the U.S. Attorney's Office has made no allegations of wrongdoing by Beazer Homes and that the statements made by an FBI spokesperson about an investigation and the scope of the investigation were unauthorized and should not have been made.

BusinessWeek has reported that the U.S. Internal Revenue Service and the Department of Justice opened a probe into Beazer's lending practices, but neither the U.S. attorney's office in Charlotte nor the IRS would comment.

According to BusinessWeek's online publication, the probe stems from a series of articles that appeared in the Charlotte Observer earlier this month.

The series described questionable lending origination practices and high foreclosure rates among some Beazer customers in the area.

Beazer has said it has found no evidence to support the accusations in the articles.

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