State Issues Involving Defunct Beazer Unit Settled

Issues that arose from the North Carolina Office of the Commissioner of Banks' examination of 2007 originations by a mortgage unit that Beazer Homes shuttered last year have been settled. Under the settlement agreement, Beazer Mortgage consented, without admitting the alleged violations, to the entry of a consent order which provides approximately $2.5 million in restitution to certain borrowers in respect of the alleged violations. This amount was included in the approximately $13 million of expense Beazer previously disclosed it had recognized in the quarter ended March 31 for estimated payments related to governmental investigations, including those involving the unit. Beazer Mortgage voluntarily ceased operations in February 2008. Beazer also has had several related discussions with the U.S. Attorney for the Western District of North Carolina to negotiate a resolution of its separate investigation into Beazer Mortgage issues. The negotiations with the U.S. Attorney are continuing and Beazer said the two parties have not reached an agreement yet. "There can be no assurance that the company can conclude an agreement with the U.S. Attorney on financial or non-financial terms that are mutually acceptable," said the homebuilder in a press release.