BOSTON (MarketWatch) -- Residential builder stocks, which were hit earlier this week by a plunge in pending home sales, were under pressure again Friday on quarterly losses and renewed bankruptcy fears.
Beazer Homes USA Inc. said it has received purported default notices from U.S. Bank National Association, the trustee under the indentures governing several outstanding senior notes.
Atlanta-based Beazer in a press release said the notices allege the company is in default because it has not yet filed its quarterly financial report with regulators for the period ended June 30. The notices allege the defaults will become events of default if not remedied within 60 days, Beazer said.
Beazer's latest disclosure only fueled concerns that some home builders may succumb to pressure from lenders and be forced to file for bankruptcy.
Hovnanian Enterprises Inc. said it swung to a fiscal third-quarter loss of $80.5 million, or $1.27 a share. The Red Bank, N.J.-based company said the results included $108.6 million of pretax charges related to land impairments and write-offs of predevelopment costs and land deposits.
Net contracts during the quarter slipped 24% from a year earlier, as total revenue fell 27%.
"Credit tightening in the mortgage market has reduced the number of qualified home buyers, existing home inventory levels remain persistently high in many of our markets and buyer psychology has been negatively impacted by a steady stream of news related to falling housing prices, foreclosure rates and mortgage availability," said Chief Executive Ara Hovnanian in the earnings release.
