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Beazer Says Will Defend Itself Against Class Action Suits

Reuters
Sunday, 1 Apr 2007 | 3:11 PM ET

Beazer Homes USA said in a filing on Friday it would review two lawsuits filed against it, one of which accuses it of following practices that allowed unqualified borrowers to get loans to buy its homes.

Beazer , the No. 6 U.S. home builder, said in the filing with the U.S. Securities and Exchange Commission it believes the suits have no merit and that it would vigorously defend itself.

The company added it could not predict the outcome of the suits or how long it would take to resolve them.

Beazer said in the filing that on March 26 it received a complaint filed in a North Carolina state court that its mortgage company used aggressive tactics to sell mortgages to unqualified buyers.

The lawsuit said the foreclosure rate in some of Beazer's subdivisions approached 20%, compared to the 3% national average. Class action status is being sought for this suit.

Beazer was not immediately reachable for comment.

The company also said in the filing it was notified on Thursday that a shareholder lawsuit seeking class action status had been filed in U.S. District Court, the Northern District in Georgia, against Atlanta-based Beazer and some of its executives.

The suit accuses the company of not disclosing facts related to "alleged improper lending practices in its mortgage origination business," Beazer said in the filing.

The shareholder suit was filed on behalf of those who bought Beazer securities between July 27, 2006 and March 27, 2007. Beazer said it had not seen that complaint.

Beazer said in a filing on Thursday that it had received a grand jury subpoena from the U.S. Justice Department for documents related to its montage origination business.

It said the subpoena from the U.S. Attorney's Office in the Western District of North Carolina was issued at the request of the Office of Housing and Urban Development, Office of the Inspector General.

Beazer said it had been in contact with the U.S. Attorney's Office and was cooperating with the investigation.

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