An internal investigation by Beazer Homes USA has found that its mortgage unit violated Federal Housing Administration rules, "particularly in relation to downpayment assistance programs," and a possible settlement with regulators could range from $8 million to $15 million, according to the Atlanta homebuilder.The violations of Department of Housing and Urban Development rules by Beazer Mortgage Corp. date back to "at least 2000," the company said, but it did not disclose the number of FHA loans involved or the default rates on those loans. A spokesman for the HUD inspector general's office declined to comment on the Beazer investigation. The homebuilder previously disclosed that the U.S. attorney's office in Charlotte, N.C., had subpoenaed its mortgage banking unit for loan production documents. Beazer also faces civil litigation from homebuyers who lost their homes. Fitch Ratings -- citing the Beazer internal probe, accounting irregularities, and "challenging" market conditions -- downgraded Beazer's issuer default rating and its senior notes from BB to BB-minus. The ratings remain on Rating Watch Negative. Beazer can be found online at http://www.beazer.com.

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