A day after Beazer Homes promised to pay $50 million to victims of its predatory lending practices, analysts say the actual payout might not be as hefty — and that not everyone who deserves money will get it.
Some say the Atlanta homebuilder is on the brink of bankruptcy and, if it files, would cease payments to the restitution fund. Even if the company stays afloat, others say, a settlement agreement that bases payments on Beazer's earnings means the builder is unlikely to shell out the full amount.
“I would advise injured parties to get in line early,” said Vicki Bryan, a homebuilding analyst with corporate bond research firm Gimme Credit.
Denise Beall and her husband, who bought a Beazer home in 2004 and can't sell it now, will be at the front of the line.
“In a way, we are wondering what's available to us, because we are responsible homeowners,” she said. “We want to know what our legal rights are.”
Federal investigators on Wednesday filed mortgage and accounting fraud charges against Beazer. But they said the company would escape prosecution if it accepted responsibility and agreed to pay up to $50 million to victims over the next five years.
The settlement wrapped up a two-year federal investigation, sparked by a 2007 Charlotte Observer series that found that Beazer used aggressive sales tactics that contributed to an unusually high foreclosure rate in many of its starter-home communities.
Read the full story at CharlotteObserver.com