Shares of Beazer Homes fell more than 8 per cent yesterday after the FBI said that it was investigating possible fraud in the company’s mortgage-lending practices and other financial transactions.

The homebuilder said that it was cooperating with an American federal prosecutor’s request for documents.

The Atlanta-based company, which has suffered hefty losses amid a downturn in the US housing market, is the subject of an investigation by the FBI and the US Attorney’s office in Charlotte, North Carolina, along with the Internal Revenue Service and the US Department of Housing and Urban Development. In a statement yesterday, Beazer said that it had been in contact with the US Attorney’s office and was co-operating with a request for unspecified documents. It said there had been no allegations of wrongdoing.

“Beazer Homes has a long-established commitment to managing and conducting business in an honest, ethical and lawful manner,” the statement said. Beazer shares dropped $2.74, or 8.7 per cent, to $28.67 in morning trading yesterday on the New York Stock Exchange after briefly sinking to a 52-week low of $27.71. Its shares had been down more than 17 per cent in pre-market trading.

Ken Lucas, a spokesman for the FBI’s Charlotte office, said that the inquiry had begun last week and involves “fraud in general” and more specifically is related to corporate, mortgage and investment issues.

He declined to give more details and would not say what had prompted the inquiry.

The Charlotte Observer newspaper reported last week that the company had an unusually high rate of foreclosure in many developments around North Carolina’s largest city. It reported that, of the 2,900 Beazer homes built in Mecklenburg County between 1997 and 2006, at least 388 had foreclosed: a rate of more than 13 per cent. Nationally, fewer than 3 per cent of buyers lose homes to foreclosure, the paper said.

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