Friday, February 01, 2008

Beazer Shuts Mortgage Company

by Tanta on 2/01/2008 10:54:00 AM

BOSTON (MarketWatch) -- Beazer Homes USA Inc. before Friday's opening bell said it is shuttering its troubled mortgage-origination unit and exiting several underperforming markets as it tries to endure the housing downturn.
The Atlanta home builder said it would stop writing mortgages through a unit, cease building homes in five markets, and enter marketing partnerships with Countrywide Financial Corp. and St. Joe Co.

Beazer will discontinue mortgage-origination services through Beazer Mortgage Corp. And it will end its relationship with Homebuilders Financial Network LLC. Instead, it will market Countrywide, the Calabasas, Calif., mortgage company, to buyers of Beazer homes as the preferred mortgage provider. Beazer will take charges, which it can't yet calculate, as it ends the Beazer Mortgage operation.

After reviewing its markets to determine where best to put its resources, Beazer said the company will exit home-building operations in Charlotte, N.C., Cincinnati/Dayton and Columbus, Ohio, Columbia, S.C., and Lexington, Ky.

It said it will complete all homes that it's currently building in those markets and will determine how to dispose of its land holdings there. At June 30, 2007, Beazer had committed some 5% of its home-building assets in those markets. It'll take charges for closing these operations as well. And Beazer said it will enter the Northwest Florida market in cooperation with St. Joe, the Jacksonville, Fla., real-estate company. The companies already work together, with St. Joe selling home sites to Beazer.
So which is worse? Being the lender preferred by Beazer, or being the builder that prefers Countrywide? I have to think about that.