Beazer_Homes

Beazer Homes USA

Beazer Homes USA

American homebuilding company

Beazer Homes USA, Inc. is a home construction company based in Atlanta, Georgia. In 2016, the company was the 11th largest home builder in the United States based on the number of homes closed.[2] The company operates in 13 states.[1]

Quick Facts Company type, Traded as ...

As of December 31, 2016, the company had 161 active communities.[1]

History

Beazer Homes USA was established in 1985 when Beazer, a British home construction company led by Brian Beazer, acquired Cohn Communities, an Atlanta-based home construction company. In 1986, the company acquired Gifford-Hill, a construction materials company. In 1988, it acquired Koppers in a hostile takeover.[3][4]

In 1991, the British parent company was acquired by Hanson.[5]

In 1994, the company became a public company via an initial public offering.[6]

In 1997, the company acquired the assets of Calton Homes of Florida for $16.7 million.[7]

In 2002, the company acquired Crossman Communities for $489.7 million in cash and stock.[8]

In 2004, the company acquired and started development on 242 home sites on Polk County, Florida.[9]

In 2006, the company acquired 86 townhome sites in Seminole County, Florida.[10]

In 2018, Beazer Homes announced it has entered into an agreement to acquire Venture Homes, a leading private homebuilder in Atlanta, for approximately $65 million. The transaction also includes substantial construction work in process as well as 51 homes in backlog.[11]

Controversies

Predatory lending and violations in mortgage servicing business

In March 2007, the company received a grand jury subpoena from the U.S. Attorney's Office in the United States District Court for the Western District of North Carolina seeking documents related to its mortgage loan origination services.[12][13] The investigation followed articles in The Charlotte Observer which noted that the company's aggressive sales tactics led to an unusually high foreclosure rate in its developments.[14]

Alleged violations of securities laws

In July 2007, the company was investigated by the U.S. Securities and Exchange Commission after Chief Accounting Officer Michael T. Rand was fired for violating ethics policies by attempting to destroy documents related to the company's mortgage origination services.[15]

In 2014, Rand was found guilty of conspiracy and obstruction of justice charges.[16]

$50 million settlement

On July 1, 2009, the company reached a $50 million settlement with several government agencies and admitted to fraudulent mortgage practices including retaining mortgage points that should have been used to lower interest rates charged, misinforming buyers that they were receiving down payment help when instead the price of the home was increased, circumventing HUD watch list programs, and ignoring borrower incomes when originating loans.[17][18][19]

Settlement of captive title insurance kickback allegations

On October 30, 2007, the company agreed to pay $261,000 as part of a $1.4 million settlement by 6 home construction companies to resolve allegations by the U.S. Department of Housing and Urban Development that title insurance companies paid kickbacks to the builders in exchange for referrals. The companies denied wrongdoing and said that they settled to avoid legal expenses.[20][21]

References

  1. [1]
    "Beazer Homes USA, Inc. 2016 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. [2]
    "The Top 100: 2017". builderonline.com.
  3. [3]
    Bohn, Earl (March 29, 1988). "HEINZ SEEKS TO HALT KOPPERS TAKEOVER". The Washington Post.
  4. [4]
    EICHENWALD, KURT (April 24, 1988). "Takeover With a Twist". The New York Times.
  5. [5]
    HICKS, JONATHAN P. (September 17, 1991). "Hanson to Buy Beazer In $609 Million Deal". The New York Times.
  6. [6]
    "HANSON TAKES BEAZER HOMES PUBLIC AND SELLS PROPERTY". The New York Times. February 24, 1994.
  7. [7]
    "Beazer acquires Florida home builder". American City Business Journals. December 1, 1997.
  8. [8]
    "Beazer Homes Agrees to Acquire Crossman in $489.7 Million Deal". The Wall Street Journal. January 31, 2002.(subscription required)
  9. [9]
    "Beazer Homes acquires 242 home sites in Polk County". American City Business Journals. April 1, 2004.
  10. [10]
    "Beazer acquires town home sites in Seminole County". American City Business Journals. August 21, 2006.
  11. [11]
    "Beazer Homes Announces Agreement to Acquire Venture Homes in Atlanta, Releases Preliminary Fiscal Third Quarter Results and Provides Outlook for Fiscal Years 2018 and 2019". www.businesswire.com. 2018-07-10. Retrieved 2019-12-11.
  12. [12]
    "Beazer Gets Grand Jury Subpoena In Probe of Mortgage Business". CNBC. Reuters. March 29, 2007.
  13. [13]
    "Builder Is Subpoenaed on Mortgage Loans". The New York Times. March 29, 2007.
  14. [14]
    APPELBAUM, BINYAMIN; HAMMERSLY MUNN, LISA; MELLNIK, TED (June 4, 2009). "Sold a nightmare: Part 1 of 4". The Charlotte Observer.
  15. [15]
    "SEC formalizes Beazer investigation". American City Business Journals. July 23, 2007.
  16. [16]
    "Charlotte Jury Finds Former Chief Accounting Officer For Beazer Homes USA, Inc. Guilty Of Accounting Fraud And Obstruction Of Justice In Second Trial" (Press release). United States Department of Justice. July 18, 2014.
  17. [17]
    "Beazer Homes U.S.A., Inc. Reaches $50,000,000 Settlement of Mortgage and Accounting Fraud with United States" (Press release). Federal Bureau of Investigation. July 1, 2009.
  18. [18]
    "United States Settles False Claims Act Allegations Against National Home Builder and Mortgage Lender" (Press release). United States Department of Justice. July 1, 2009.
  19. [19]
    HENRIQUES, DIANA B. (July 1, 2009). "Beazer Homes Reaches Deal on Fraud Charges". The New York Times.
  20. [20]
    "Beazer Homes, other builders agree to $1.4M HUD settlement". American City Business Journals. October 30, 2007.
  21. [21]
    "Builders to settle kickback probes". Bloomberg News. Los Angeles Times. October 30, 2007.
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