Beazer Homes USA Inc.(BZH), the sixth-largest U.S. home builder, on Wednesday confirmed it is cooperating with federal prosecutors in a probe relating to its mortgage business.

The Atlanta-based company said it has been in contact with the U.S. attorney's office and received a request for documents concerning the mortgage business. "At this time, there have been no allegations of any wrongdoing," it said in a statement.

Beazer made its comments one day after a representative at the FBI's office in Charlotte, North Carolina, said the agency was "conducting a potential fraud investigation" regarding Beazer.

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Earlier Tuesday, BusinessWeek said U.S. authorities were investigating Beazer's lending practices.

Beazer's shares were off 12 percent at $27.64 in premarket electronic trading after earlier falling 18 percent to their lowest level since August 2003.

BusinessWeek said the FBI, Internal Revenue Service and Justice Department recently opened a probe into Beazer's lending practices.

The investigation followed articles published this month by the Charlotte Observer newspaper that detailed allegations of abusive lending practices and high foreclosure rates in some Beazer developments, BusinessWeek said.

Beazer builds many houses for first-time home buyers. The company said it has found no evidence in internal investigations to support allegations in the Observer articles.

Last week, a North Carolina law firm filed a lawsuit in state court seeking class-action status against Beazer, accusing the home builder and its mortgage company of selling mortgages to unqualified buyers. The suit seeks damages for each class member of less than $74,999.

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