Beazer to refund $2.5M in mortgage fees

Posted May 19, 2009 10:51 a.m. EDT

— Beazer Mortgage Corp. has agreed to refund $2.5 million to more than 1,000 North Carolina borrowers as part of a settlement with the state Commissioner of Banks, officials said Tuesday.

“We believe that many homebuyers were sold loans from Beazer Mortgage that violated North Carolina law,” Deputy Commissioner of Banks Mark Pearce said in a statement. “These homeowners will receive a substantial refund of fees we believe were collected illegally.”

The state investigated Beazer in 2007 and identified numerous violations of North Carolina’s lending laws, such as failure 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, officials said.

Through the settlement, Beazer will provide substantial refunds of discount points to homeowners. The average refund will exceed $1,500 and will be disbursed in the next 60 days, officials said.

Beazer surrendered its mortgage lender license to the state last year and has discontinued all mortgage origination and servicing activities in the state with respect to mortgage loans.

Borrowers eligible for refunds don't have to take any action to receive the refund. Anyone with questions regarding a refund may contact Beazer’s settlement administrator at 866-397-0923.