Beazer to refund millions to NC homeowners

May 19, 2009 7:45:48 AM PDT
Beazer Mortgage Corporation will refund $2.5 million to North Carolina homeowners as a part of a settlement agreement.The NC Office of the Commissioner of Banks ordered the company to refund discount points to over 1,000 homeowners.

NCCOB identified a number of serious violations of NC's lending laws after conducting an investigation of Beazer in 2007. Specifically, it alleged Beazer "failed to comply with North Carolina's requirement that discount points be bona fide and paid for the purpose of reducing a borrower's interest rate."

A "discount point" is a fee paid by a borrower for the purpose of reducing the borrower's interest rate from the prevailing market rate.

Routinely, the borrower is able to choose to pay a discount point to get a lower interest rate and lower monthly payments on the home loan. As a result, the lowered payments offset an upfront fee. According to the investigation, the discount points charged in Beazer loans did not function in that manner.

Beazer surrendered its mortgage lender license to NCCOB in 2008. Beazer also discontinued its mortgage activities in NC. As part of the settlement, NCCOB has agreed to take no further action against Beazer.

Borrowers eligible for refunds do not have to take any action to receive the refund. The average refund will exceed $1,500 and will be disbursed within the next 60 days.

Borrowers with questions regarding their refund may contact Beazer's settlement administrator at (866) 397-0923.

The settlement agreement and order are available on NCCOB's website at: https://www.nccob.org/Online/NMLS/CommissionOrderListing.aspx.


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