March 29 (Bloomberg) -- Beazer Homes USA Inc., the homebuilder under investigation by the FBI, received a federal grand jury subpoena for documents related to its mortgage origination business.

The U.S. Attorney in the Western District of North Carolina issued the subpoena at the request of the inspector general of the U.S. Department of Housing and Urban Development, Atlanta- based Beazer said today in a regulatory filing.

``The United States Attorney has made no allegations of wrongdoing by Beazer Homes at this time,'' the company said. Beazer is cooperating with the Justice Department investigation and said it hasn't received a request for information or documents from the FBI or IRS. The FBI confirmed its probe on March 27.

The Charlotte Observer reported on March 25 that Beazer sold homes to low-income buyers who couldn't afford them. The loans were based on the assumption that the buyer's income would rise. The Federal Housing Administration, which provides loan guarantees for lower-income borrowers, restricted that practice in 2004, the newspaper said.

``Authorities may be looking at brokers or appraisers looking the other way or encouraging people to falsify their loan applications,'' said John Floyd, a Houston criminal defense lawyer who has represented hundreds of brokers, appraisers and buyers in mortgage fraud cases.

Class Action Lawsuit

Suellen Pierce, a spokeswoman for the U.S. Attorney in North Carolina, and HUD spokesman Michael Zerega declined to comment. Beazer spokeswoman Leslie Kratcoski didn't return a phone call for comment.

The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP said today it filed a class action lawsuit against Beazer in U.S. District Court in Georgia. The complaint claims the company increased sales by making loans to low-income borrowers that it knew wouldn't be able to pay their mortgages after the first two years.

Shares of Beazer rose 51 cents to $29.28 at 4:17 p.m. in New York Stock Exchange composite trading. The stock has declined 12 percent this week and 56 percent in the past year.

Beazer didn't disclose in today's Securities and Exchange Commission filing the nature of the U.S. Attorney's investigation or the type of documents subpoenaed.

Housing Slump

The investigation comes as homebuilders are reporting increasing inventories and declining sales in the deepest housing slump in 15 years. Rising defaults among borrowers whose poor or limited credit histories force them to pay higher interest rates on subprime loans may boost the supply of homes and push prices down further.

Beazer, the ninth-largest U.S. homebuilder by revenue, reported a net loss of $59 million, or $1.54 a share, for the quarter ending Dec. 31 because of asset writedowns and deteriorating sales.

The company builds houses in more than 20 states with an average home price of $287,000. A subsidiary, Beazer Mortgage Corp., finances, originates, processes and brokers mortgages to homebuyers and provides title services, according to a regulatory filing.

The Charlotte Observer reported yesterday that the IRS and HUD are part of the FBI investigation. Ken Lucas, a spokesman for the FBI's Charlotte office, confirmed the report today.

The FBI has 1,036 open investigations of possible mortgage fraud, double the number in 2004, said FBI spokesman Stephen Kodak. These include inflated appraisals, identity theft, foreclosure schemes and sub-prime loan abuses, among other possible offenses, he said.

To contact the reporter on this story: Sharon L. Crenson in New York at screnson@bloomberg.net.

Last Updated: March 29, 2007 18:18 EDT