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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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A Charlotte, North Carolina FBI agent stated that the FBI and the US Attorney’s Office, along with the Internal Revenue Service and HUD launched an investigation of Beazer Homes after the Charlotte Observer reported that there was an abnormally high foreclosure rate in one of their new home developments in North Carolina. Seventy-seven homes went into foreclosure in the in the Southern Chase subdivision of 406 new homes.
Beazer Homes acknowledged that the company was under investigation and has released two statements. In the first, the company states, ”The allegations by the Charlotte Observer focused primarily on one Charlotte subdivision, Southern Chase. In that subdivision, Beazer Mortgage Corporation originated the loans for the borrowers and served as a broker, not a lender. We were involved on the front end of the loan transaction process, compiling the necessary information, which we then submitted to the lender for underwriting review. The ultimate underwriting decision for the loan rested with the lender. ”
“Based on our internal investigations to date, we have not found any evidence to support the allegations in the Charlotte Observer.”
In the second statement the company let it be known that, ”Beazer Homes has been in contact with the U.S. Attorney’s Office and, at this time, there have been no allegations of any wrongdoing. Instead, Beazer Homes has received a request for documents generally relating to its mortgage business.” They further stated that, ”We have further been told by the U.S. Attorney’s Office that the statements by the FBI and published by Business Week were not authorized and should not have been made.”
It’s about time that the builder’s are investigated. When you raise the purchase price to “purchase” financing for unqualified borrowers and pay extremely high commissions to realtors you are inflating the values and setting up the community for disaster.
Posted by on 04/03 at 05:50 AM
Builder controlled mortgages are a complete conflict of interest. I don’t see Remax Mortgage, Century 21 Mortgage, or Coldwell Banker Mortgage out there. I think if the FBI & the US Attorney’s office took a look at the total builder package and really dug into their practices they would be shocked and horrified.
Posted by on 04/04 at 08:11 PM
Unfortunately Coldwell Banker (those owned by NRT) do have their own Mortgage Company. In fact, I have first hand knowledge that they are waiving desk fees and paying higher commission splits to the agents that have a high “capture rate” with their controlled entity. ABA’s are the problem with today’s mortgage market. ABA’s are simply a supposedly legal way to pay an otherwise illegal kickback. I dare the authorities to cross reference all of the loans in foreclosure with ABA’s and without. I bet that loans originated with an ABA have a higher overall foreclosure rate.
It’s simple. When the builder, lender and title company are all owned by one entity the client simply does not matter. It all boils down to greed.
Posted by on 04/05 at 08:14 AM
Actually most realty companies work in conjuction with mortgage brokers and investors. Example you may have John-Smith realty....who works with Smith-John mortgage ....who looks for investors or lenders to finance the loan....also most realty companies have their own title companies Many times owned by the individuals who own the realty....so you have the realtor getting the realtor fee..loan officer collecting a broker fee and the title company collecting the title fees and they are owned all by the same company. >>>>>FIGURE THAT ONE OUT. Talk about covering your bases.
Posted by on 04/09 at 08:57 AM
I agree the builders should be investigated. One of my borrowers was told if my company did their loan instead of the bldr in-house lender the sales price would go up $11,000.00! That’s not legal, not to mention just plain wrong. Where is the Ralph Nader of the mortgage industry???? Someone needs to be looking out for the consumer.
Posted by on 04/11 at 01:02 PM
We are under constant pressure from the Building and realtor community daily. I spoke with a RE Broker last week who stated, “ A desk rental fee just isn’t enough to let a Mortgage Company come in my office.” Quality customer service solid financial products are no longer satisfactory requirements of the lender/broker. It is, unfortunately, all about the buck! There are too many weak Loan Officers in our industry who buckle to the demands of both builders and realtors demands for “referral fees.” The problem not only lies in this LO weakness and passion for the buck, but the total lack of enforcement by regulators. It is a slap in the face to those of us who contunue to put our client’s’ interests first in spite of watching those who see great financial gains from these unethical & costly practices. And HUD was wanting to changes RESPA and allow for the bundling all these services! Yikes!
Posted by on 04/27 at 03:59 AM
Who can I contact regarding Beazer Homes mortgage fraud in my area? There was almost a $10,000 difference between the Good Faith estimate and the actual closing costs. When I asked about the huge difference, I was informed, “I forgot to add the Federal, State, and Local taxes”. My question was why the great difference and I did not have that kind of money laying around. The rep replied, “You have it in your savings account. Use that money.”
Posted by on 05/26 at 05:56 PM
I am a former employee of Beazer Mortgage. Realtors and builders are gladly selling forclosure to keep sales numbers and capture rates up.
Posted by on 06/22 at 07:39 AM
Beazer Mortgage and the builder (Beazer Homes) did not disclose on my good faith estimate or my final settlement statement that I would have to pay taxes to the City of Cambridge. I was told that I would pay county (Dorchester) and state taxes. After purchasing the townhome, I later received a bill from the city stating that I owed additional taxes to the city. If I had known that I would have to pay city, county AND state taxes, I would not have purchase the property. Is Beazer Mortgage and Beazer Homes liable for not disclosing this information? I looked through all my paperwork and there is no mention of city taxes. I know of six other owners with the same problem. If any one has an answer, we would appreciate it very much!
-- One other thing . . . the builder (Beazer Homes) has also lowered its sales price around $100,000! I asked my sales rep. when I bought . . . would this ever happen? I was told absolutely not. Unfortunately, I don’t have this in writing. Any legal ramifications for this or am I just out of luck?
Thanks, Wendy
Posted by on 07/12 at 07:01 PM
Thats not all beazer is being investigated against they really are not a good quality home builder at all if youre in virginia maryland or washington dc area buying real estate you should skip beazer homes entirely. beazerhomereview.com
Posted by on 07/21 at 11:45 AM
Take my word never buy a beazer home, if your realtor suggests a beazer home for you get another real estate agent beazerhomereview.com
Posted by on 07/21 at 11:50 AM
Stay away from Beazer seems to work very well these days, buying a beazer is not a smart decision
Posted by on 07/22 at 09:49 PM
The more an more often I see cases like this I begin to see that some people were genuinely taken advantage of in the real estate market.
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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