Beazer Homes Agrees to Pay $53M to Settle Mortgage Fraud Charges
In the most blatant case of mortgage fraud disclosed to date, Atlanta-based Beazer Homes USA Inc. has agreed to pay a total $53 million to settle a U.S. Dept. of Justice lawsuit.  In a separate action, the Securities and Exchange Commission has filed civil charges against Michael T. Rand, Beazer's former chief accounting officer. Rand is accused of conducting a fraudulent earnings scheme and hiding his wrongdoing from outside auditors and other company accountants. The New York Times and The Washington Post report separately that In the mortgage fraud case, prosecutors said Beazer ignored income requirements in making loans to unqualified buyers, and sought to hide from the Federal Housing Administration that some company branches had excessive default rates on their loans.... In the end, the SEC said, Beazer understated the company's income in SEC filings by $63 million between fiscal years 2000 through 2005. In addition, the company overstated its income and understated losses by a total of $47 million in fiscal year 2006 and the first two quarters of fiscal year 2007.

Georgia's Homeowner Maintenance Responsibilities - Warrenty, What Warranty?
Interior wood trim may shrinkage can result in separation at joints of trim pieces. You can usually correct this with caulking and touch-up painting…separation at joints of trim pieces…drive in another nail…Fill the nail holes with putty and touch up with paint as needed. Wood frame walls that are out of square are not considered deficiencies. Wallpaper: Builder is not responsible for minor mismatching in pattern or color.  Tell us what you think is outrageous  Read more...Greater Atlanta Home Builders Association Builder Warranty

Chinese drywall blamed for odors and corrosion in U.S. homes
State and federal authorities have traced the problems to Chinese-made drywall but haven't yet fully determined the causes. Some Chinese experts, however, suspect that the culprit is a radioactive phosphorus substance -- phosphogypsum -- that is banned for construction use in the U.S. but has been used by Chinese manufacturers for almost a decade...Phosphogypsum contains radium, prolonged exposure to which can lead to a higher risk of lung cancer, and that is why the EPA banned phosphogypsum for use in construction in 1989...Some people in China liken the practice of mixing phosphogypsum in drywall to the recent scandals involving melamine, the industrial chemical that contaminated Chinese baby formula and animal feed.

So Many Foreclosures, So Little Logic
LAST week, the stock market tumbled on news that housing foreclosures and delinquencies rose again in the first quarter. The Office of the Comptroller of the Currency said that among the 34 million loans it tracks, foreclosures in progress rose 22 percent, to 844,389. That figure was 73 percent higher than in the same period last year. Foreclosures remain one of the great financial ills for the economy. The Bush administration largely overlooked foreclosures affecting average homeowners, focusing instead on propping up elite, troubled financial institutions with taxpayer funds. The Obama administration has said it wants to wrestle the foreclosure issue to the ground by encouraging mortgage loan modifications, but its efforts have gotten little traction...But the most fascinating, and frightening, figures in the data detail how much money is lost when foreclosed homes are sold. In June, the data show almost 32,000 liquidation sales; the average loss on those was 64.7 percent of the original loan balance.

Beazer To Pay Up To $53 Million To End Mtge Fraud Charges
Beazer Homes USA Inc. (BZH) will pay up to $53 million to settle mortgage fraud charges related to federally insured mortgage loans the company made to buyers of its homes, the Justice Department announced Wednesday. The department said Beazer will pay $5 million to the federal government and up to $48 million to victimized homeowners.  The settlement is tied to an agreement with federal prosecutors in North Carolina that will allow the Atlanta-based company to avoid criminal prosecution on the mortgage-fraud charges, and on other accounting-fraud charges related to the manipulation of company earnings.

Shoddy Construction Haunts Home Buyers
Like California, Texas and Florida, Nevada experienced a surge in construction-defect claims in recent years... Owners of defective properties say they're finding it even harder to get repairs now because of rising builder bankruptcies. Some builders, especially smaller ones, also carried inadequate liability insurance, construction experts say. Other homeowners say they are hamstrung by mandatory binding arbitration clauses in purchase contracts and new-home warranties, as well as " right to cure " laws, which require homeowners to notify builders and give them a chance to remedy a defect before the homeowners can file a lawsuit. More than 30 states have some type of right-to-cure legislation, according to the home-builders group.

On home defect legislation, lobbyists went to the wire
Construction defect settlements are governed by Chapter 40 in Nevada statutes, and builders have grown to hate it. They seethe as each new defect notice, or "Chapter 40 notice," arrives by mail or courier... And then there were the feds. In an ongoing investigation, the FBI appears to be looking into whether homeowner associations and their elections have been corrupted by businesses "€” including possibly construction defect law firms "€” so they could bring suits against builders and win those guaranteed legal fees...To scrap Chapter 40... The net result of eliminating Chapter 40, and Wadhams' real goal, was to all but eliminate construction defect costs for builders....Builders would then force homebuyers to sign contracts that protect them from liability...A builder lobbyist was open about why they walked away with nothing...

Obama Fails to End Kangaroo Courts for Investors
Requests for arbitration hearings are up 85 percent so far this year at the Financial Industry Regulatory Authority...Too bad it's just as likely that the same chumps who fell for Wall Street's array of misleading products are headed straight into a justice system that will take them for a second ride.  More than half the investors who go through a Wall Street arbitration get nothing at all, and those who do win get about half what they claim to have lost. Once they are in a hearing room, investors typically face a panel of three judges that includes someone from the very industry that got them into the mess in the first place -- Wall Street.

Pre-Dispute Binding Arbitration Clauses Perpetuate Injustice
When someone is wronged by another, he or she expects to find recourse in our justice system. When a corporation takes advantage of a consumer, that person often takes solace in the fact that she will have her day in court. More and more, however, these hopes and expectations are never realized. Victims are shocked to learn that they have contractually signed away their right to go to court. Pre-dispute mandatory binding arbitration agreements represent a fundamentally unfair method for holding corporations responsible for their wrongdoings. Consumers and employees are kept in the dark as to their rights, and they are not free to bargain for a better deal. Instead, they must "take it or leave it" and run the risk of facing a potentially biased tribunal who will decide the outcome of their case.

Public Citizen says rules tilt playing field toward builders
A national consumer advocacy organization is urging attorneys general in 17 states, including Georgia, to enforce bans on mandatory arbitration clauses often used by the home building industry... One metro Atlantan who agrees with the group is Marietta resident Greg Cole. He says construction problems at his $429,000, 3,400-square-foot house led to cracks, leaks and mold that sickened the whole family. They went to binding arbitration with John Wieland Homes and Neighborhoods, as the home warranty required, but Cole said the house has not been fixed and continues to deteriorate. His family lives elsewhere.

Town To Pay Couple Over Damages To Home
The town has been ordered to pay $14,615 to a couple who claimed in a lawsuit that the town was responsible for damages to their home because officials failed to follow its building codes... The August 2006 lawsuit claimed that the town, Public Works Director Richard Kelsey and Stephen Giarratana, who was then building inspector, were responsible for flooding and erosion damages and other problems at their home...Since the builder David Fugge, could not be located, the couple was granted $30,000 from the Connecticut New Home Construction Guarantee Fund.

KEYE Investigates: city workers spend time at bowling alley during work
How would you like to spend several hours of your workday at a bowling alley or bbq restaurant? KEYE found some City of Austin employees doing just that. As investigative reporter Nanci Wilson shows us - they are being paid with your tax dollars.  See Investigative Report

Investigates Follow Up: Austin addresses city inspectors issues
One of the scandals that rocked Austin City Hall recently was a KEYE investigation into how some city building inspectors spend their time on the clock and use city take-home vehicles. The story sparked a city investigation, calling for a closer watch on workers. Austin "I think that the behavior that I witnessed in the news coverage was absolutely disturbing and unacceptable," City Manager Mark Ott said. "So we're very focused on making sure that that kind of behavior doesn't occur in the future -- and people are focused on doing their job and doing a full day's work."

City of Austin paying for some employees daily out of town commute
When fuel prices soared past $4 per gallon this summer, it prompted most drivers to take a serious look at the time they spend on the road. Many downsized their vehicles, considered carpooling or made fewer trips. So, why didn't the City of Austin Watershed Protection and Development Review Department (WPDR) opt for any of these cost saving measures? One residential inspector drives his city truck back and forth to his home in McDade. McDade is in Lee County, on the other side of Bastrop. It's a 359 miler per week commute, but it doesn't cost the inspector a dime. It's courtesy of the City of Austin taxpayers.

Riverside official loses early round in building dispute
Riverside City Councilman Frank Schiavone and his former custom-homebuilding business partner are personally liable for fraud and negligence in the construction of a Riverside home and a second structure in the back yard, an arbitrator has tentatively ruled... Melgarejo alleged that a number of defects in the two buildings emerged after construction, including improper plumbing that caused sewage to back up into sinks, toilets, bathtubs and the yard; water seepage through window frames, sliding doors and the roof; the growth of mold; and cracking in the buildings' drywall and stucco. Another allegation was for fraud - for building aguesthouse behind the main house without obtaining the proper city permits for it and for its sewage system.