Cover Story: Beazer's sweet deal? - | WBTV Charlotte

Cover Story: Beazer's sweet deal?

By Jeff Atkinson - bio l email

CHARLOTTE, NC (WBTV) - Was it a sweet deal for Beazer?  An admittedly crooked mortgage lender got off easy, so says the government's top housing authority.

Beazer Homes ripped off thousands of local homeowners, but that company is still in business while real people are still hurting.

A top HUD official blames federal prosecutors in Charlotte. He says they should've done more to help the people who were gypped by Beazer.

And in our community hundreds of people were victimized.

Beazer is the company that fudged paperwork to put people in homes they couldn't afford. 

The company pulled out of Charlotte in 2008.  Last year, Beazer agreed to a multi-million dollar fraud scheme.  The company was forced to set up a restitution fund for victims.

But the head of HUD says federal prosecutors in Charlotte should've done more.

Thousands of Beazer victims still haven't received compensation because they don't even know they're eligible.  Beazer's not required to get hold of the people they gypped.

But there are a handful of people at Charlotte School of Law who have taken it upon themselves to get these victims exactly what they're owed.

It fulfilled a dream when LaRonda White moved in six years ago:  to own a home at age 25.

It was a brand new home in the suburbs south of Rock Hill.  The home was built by Beazer, the same company who did her mortgage.

"I was young when I bought my house," says White.  "I was 25, just excited about getting a house and not really knowledgeable in what I needed to look out for."

What White didn't pay attention to, she admits now, is the fine print in the settlement agreement.  Like many first-time home buyers who bought Beazer homes between 2000 and 2007, LaRonda White had been defrauded.

Beazer provided down payment assistance to homeowners only to jack up the price of the house to recoup their money.  And tampered with interest rates.

Federal prosecutors got Beazer to admit its wrongdoing and set up a restitution fund.

But according to documents obtained by WBTV the Inspector General of the U.S. Department of Housing and Urban Development says the Justice Department and local U.S. Attorney's Office soft-pedaled its investigation into Beazer and watered down the settlement amount the company ultimately paid.

The HUD official says federal prosecutors "seemingly" relied on a law firm hired by Beazer to do the investigation, which Charlotte School of Law professor Mark Heekin says raises eyebrows.

"It is not typical for the prosecution to rely on the findings of the subject being investigated's counsel. It appears that's what happened in this case," he said.

The investigation cost between $35 to 50 million, money the HUD Inspector General says could have gone to victims and taxpayers.

"There's a real need out there," says Professor Sean Lew of Charlotte Law's Pro Bono Program.  "Charlotte Law is one place individuals can turn to during this time," he says.

Almost 400 homeowners have attended free clinics and one-on-one sessions the school's hosted for victims of Beazer Home Mortgage - helping them file claims to get the money they're due.

LaRonda White got back the more than $8,000 she was overcharged and she remembers her first thought when she got the news.  "Thank you Jesus.  Yeah it was a blessing," she said.

Iowa Sen. Chuck Grassley sent a letter to U.S. Attorney General Eric Holder asking him to look into the Justice Department probe of Beazer.

Grassley wants to know among other things why Beazer was allowed to put a cap on its restitution fund when the company had between $35 and 50 million for attorney's fees.

How much is in the restitution fund?  The settlement was for $10 million but it can go up to $50 million.  Charlotte Law says it will continue to hold its clinics till the final date of the fund which is 2014.

To reach the Charlotte School of Law's Public Interest Law Society call (704) 971-8382 or email clinic@charlottelaw.edu

 

 

 

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