Beazer Fallout Hits Homebuilders

Shares in the sector slumped Wednesday on word of a criminal probe of the Atlanta-based company's lending practices

Homebuilders came under fire in the market again on Mar. 28 after news that the North Carolina field offices of the Federal Bureau of Investigation, the Internal Revenue Service, Inspector General of Housing & Urban Development, and the Justice Dept. have opened a criminal probe into lending practices, some financial transactions, and other dealings at Beazer Homes USA (BZH) (see BusinessWeek.com, 3/27/07, "Feds Are Investigating Homebuilder Beazer"). The headline reignited investor fears during recent weeks about industries that are feeling the pain from the housing slowdown.

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