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Beazer Shares Tumble After Firing Chief Accountant

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June 28 (Bloomberg) -- Shares of Beazer Homes USA Inc. fell as much as 8 percent after the company said it fired its chief accounting officer for attempting to destroy documents while it is under investigation for potential fraud by the FBI.
This raises red flags regarding the content of the documents in question, in our view,'' Michael Rehaut, an analyst at J.P. Morgan Securities Inc. wrote in a report yesterday.

http://www.bloomberg.com/apps/news?pid=206...refer=worldwide

so much bad news the ycan't hide it anymore.

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What is wrong with this, it is standar practice in our Government departments.

Cash for questions? As the police moved in, the shredders worked overtime.

In fact, the Civil Service have been ordered by New Labour on several occassions to destroy documents, particularly leading up to the last election.

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"This raises red flags as to the contents of the documents, in our view..." a Morgan stanley analyst said. LOL. No sh*t Sherlock. And we wonder how these guys could have possibly missed the storm that was a-brewin' in the mortgage market.

There is a lot of fake surprise around at the moment.

People and companies at all levels were only too happy to keep quiet whilst the commission cheques were handed out and the spin off from dodgy business kept trundling through the balance sheets of all and sundry.

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DoctorJ

A couple of years ago or so I was highlighting loads of stuff from the likes of the appraisers forum (a US house appraiser forum). On it there were many, many long time served domestic property appraisers who were pulling their hair out as to what was going on on their patch. Many loan companies were number hitting, they had no interst at all in the actual market value of a property, just the appropriate figures to make the loan work. The loan companies were hunting out appraisers who would write whatever the loan co. wanted to here, non-compliant appraisers were being scratched from their work lists. From the very bottom it was thus obvious valuations for a lot of new loans were simply pie in the sky. Enough pie in the sky valuation and even the official stats start reflecting these made up numbers. Thus, right from the very bottom elevated and false sums started infecting the figures right up to the loan books being sold off as investment grade paper. On the borrower side, inflating income also became commonplace, again with the brokers, loan arrangers and loan companies all complicit in the action, in fact whole mortgage product ranges had to created in order to allow this to occur and again the results of this have filtered through the system all the way up to the paper that invesment banks have been selling off into the wider investment market.

In short, falsification of documentation, valuations and incomes actually became the business model, so much so even from the outside of the industry it was pretty damn obvious what was really going on. The biggest questions asked may well be how the toxic waste at the end ever got rated at all, let alone rated at investment grade product.

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Only Me-

That was a good summary of some of the fraud that's been going on here. You've left out only one piece of the picture: Hitting the numbers on appraisals to enable people to take out HELOCs (Home Equity Line of Credit, lol) on their properties. People have been getting loans against their homes for hundreds of thousands of dollars based on phoney inflated appraisals. ie. Buy a house for 400K using a liar loan then go back next year, have it reappraised for 600K and get another 200K "loan" against the house = "Instant Equity!!" Even the RE ads for individual homes here on the MLS had "Instant Equity!" as part of their description.

ie. " Instant Equity!!!! Charming 3 bed/2bath, desirable neighborhood, large yard, 500K".

Again, the lenders were not making loans, they were giving money away. There was no way this money could ever be re-paid. But that did not matter to the originating lender as they just collected their fee then promptly sold the loan off to Wall Street. This is why, for the past couple years there's been talk at the Federal Reserve and in the Congress and Senate to institute new rules that require lenders to come up with a "new model " that includes the concept of ***The buyer has the ability to repay this loan***** when granting loans. (This still has not happened by the way).

The whole concept of lending money was turned on it's head the past 10 years. There's a blog here that tracks some of these outrageous HELOC loans. Called Bubble Markets Tracking or something. dang, wish I knew the name of the site. None of these crap loans were a problem for originating lenders until last year when the market topped out and people began defaulting in large numbers within months of taking out their loans. Wall Street had a 1 year grace period within which they could "return to sender" loans that were defaulting. When WS began sending the loans back to originators to buy back, the originating loan companies did not have enough money to buy the loans back, hence "Implode-O-Meter".

It's been positively surreal. Once the fraud's been worked through, it will take a long time to find out what the true value of these properties are.

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