Builder Watch: Beazer Homes Posts $110 Million Net Loss
Posted on 13. Aug, 2008 by Joshua Ferris in Builder News
Enclave at Hamptonburgh
Beazer Homes, known locally in Orange County New York for their communities of Glenview Hills at Florida, Enclave at Hamptonburgh and Riverside at Walden, recently posted a net loss of just under $110 million dollars for the third quarter of 2008.
In addition to a grim third quarter, Beazer Mortgage Corp. continues to deal with legal woes stemming from suspected HUD regulation violations from Beazer Mortgage Corp’s down-payment assistance program. Originally brought about by an investigation by the Charlotte Observer in March 2007 that revealed a number of homeowners who used the down-payment assistance had foreclosed on their homes in a 9 year period, the case has since spawned several investigations by state and federal governments including the SEC and U.S. Attorney General’s office in the Western District of North Carolina.
Beazer Mortgage Corp. ceased loan originations in February 2008 and is now working in conjunction with Countrywide Financial Corp. to provide mortgage options as the “preferred lender” of Beazer Homes Corp. No stranger to headlines themselves, Countrywide Financial Corp. was acquired by Bank of America in January 2008 for $4.1 billion and recently found itself the subject of an FTC probe over loan servicing.
Is there good news in sight? Although Beazer Homes has much soul searching to do, the builder did slash their backlog of homes from 5,952 homes in 2007 to 2,716 in June 2008. Their net loss is also down $9.2 million from third quarter 2007 to $110 million showing Beazer is getting leaner and still selling homes.
Our Recommendation: It’s always important to do your research on any home builder before committing to a new home community. Key points to review while looking for a new home include financial health of the builder, how far from completion the entire community is (Will they finish or will they back out of the project and attempt to sell the remaining lots?) and what loan options are available to you through different lenders.
We’d love to hear what you think! Comment below and let us know your thoughts on this new development in the ever changing real estate industry.