Beazer Mortgage to refund millions to N.C. borrowers

"In particular, (the banks commissioner's office) 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," the release said.

Beazer will provide substantial refunds of these discount points to North Carolina homeowners, the settlement said, but Beazer admits no wrongdoing in the agreement.

Beazer Mortgage ceased operations in February 2008.

The settlement is the second such announcement for the company this month. Beazer also agreed to a $30.5 million settlement of a Georgia class-action lawsuit that accused the company and its top executives of artificially inflating the company's stock price on sales generated by loans to unqualified buyers. The builder also admitted no wrongdoing in that case, brought on behalf of shareholders.

Meanwhile, Beazer is still in negotiations with the U.S. Attorney for the western district of North Carolina, where federal and state investigators are also looking into Beazer and the lending practices of Beazer Mortgage.

"While there is no agreement with the U.S. Attorney, such negotiations have included the possibility of future payments linked to the company's ability to return to generating positive earnings and a limit on total liability of approximately $50 million over 60 months," Beazer president and CEO Ian J. McCarthy told investors during the second-quarter call earlier in the month.