Hovnanian Enterprises Inc. (NYSE: HOV) announced Monday morning that it will sell up to $775 million (WSJ subscription required) of seven-year notes in order to fund its previously reported tender offer for up to $759.3 million in debt. The struggling homebuilder also reported that $877 million of the notes were tendered by the early deadline on Friday. As a result, Hovnanian reduced the maximum amount of unsecured notes it will buy from $130 million to $100 million.

Last week, a Wall Street Journal article noted that Hovnanian is "hobbled" by its debt, even as the rest of the industry is ready to buy up land at a bargain. As of July 31, Hovnanian's net debt accounted for 109% of total capital, compared to an average of 26% for the dozen major homebuilders tracked by research firm Zelman & Associates.

New construction of single-family homes in November fell to its weakest pace in 16 years, as builders cut back construction amid a growing supply of unsold homes, the U.S. Commerce Department announced Tuesday.

Single-family homes starts fell 5.4% in November to a seasonally-adjusted rate of 829,000, the Commerce Department said. Total starts, which include multifamily units, fell 3.7% in November, to 1.19 million units, but came in higher than the 1.17 million consensus estimate.

Meanwhile, building permits, which are a sign of future construction and one measure of housing strength/weakness, fell 1.5% to an annualized rate of 1.15, in-line with the 1.15 million consensus estimate. Single-family permits 5.6% to an annualized rate of 764,000: single-family permits are down 34% in the past year, the largest 12-month decline since 2001.

The Ryland Group Inc (NYSE: RYL), the California-based homebuilder, released preliminary results last night. What continues to be most striking about homebuilder results is the magnitude of cancellations, suggesting either how widespread speculation was or how difficult it is for new homebuyers to get financing.

Cancellations were approximately 34 percent of gross orders for the quarter, compared to 35.9 percent in the second quarter 2006. Preliminary closings totaled 2,461 units in the period, compared to 3,803 units in the second quarter of 2006, a decline of 35.3 percent.

These are simply huge numbers. Add to this the shakeout that continues to unfold in the mortgage market as hedge fund and investment firms have to mark their portfolios to market for less liquid holdings, suggesting the housing and mortgage market still have a long way to go before the industry's problems are behind them.

Beazer Homes USA Inc (NYSE: BZH): House of Cards?

Home builder Beazer said in a regulatory filing yesterday that it terminated its Chief Accounting Officer for violating the company's ethics policy. Beazer said it fired Michael T. Rand after an internal probe of the company's mortgage origination business. The Atlanta-based company said the action was taken by its board and management after saying Rand violated the company's ethics policy by attempts to destroy documents.

The country's sixth largest home builder is currently under investigation by the FBI and is the subject of several lawsuits. Earlier this year, media reports noted that the company was under federal investigation for alleged mortgage fraud, a charge Beazer has vehemently denied. In May, it announced the SEC was conducting an informal inquiry to determine if the company, or its employees, had violated any securities laws.

Rand's firing is bad news for the Atlanta company, particularly because of the FBI investigation. JP Morgan analyst Michael Rehaut said that Rand's termination "raises red flags regarding the content of the documents in question." It is unclear whether the allegations against Rand will become part of the investigation.

Rand is the second senior official to be fired at Beazer this year. The company dismissed Kenneth Gary, its general counsel, in February for "a pattern of personal conduct" that included violations of company policies. Former CFO James O'Leary resigned from Beazer in March. Shares of the company, whose competitors include D.R. Horton Inc (NYSE: DHI) and Pulte Homes, Inc (NYSE: PHM), fell nearly 8% on yesterday's announcement; shares have fallen more than 40% this year.

Who's responsible for the company's troubles? Rand, the others, or is the company looking for scapegoats?