by Ralph Roberts
For more than 30 years, I have been in the business of selling the American Dream of homeownership. I live to find families the perfect home for their budget and lifestyle, and I take great pride in helping to set these families on the path to pursuing happiness.
Unfortunately, not everyone in the real estate industry is committed to serving homeowners. Many are more dedicated to serving their own self-interests. I recently received a letter from a couple who had become victims of a manufactured housing fiasco. I would call it a scam, but without knowing more about the alleged perpetrators' motives, the incident doesn't quite qualify. According to the couple, Delena and Joseph LaMacchia, of Cherryville, North Carolina, here's how the situation unfolded:
At the time, Joe and I (Delena) were renting a home where we lived with our four children. It was a nice home, but we were looking for something that would give us a little more room. For about three months, we shopped around for quotes on manufactured homes from different contractors. Finally, I went on the Internet, searched for "champion homes," and discovered Bessemer City Housing in Bessemer City, North Carolina.
I contacted the salesperson, who quoted me a price that was $20,000 less than the lowest quote I currently had on the same home. I asked whether certain things were included, and he said, "Yes." All together, we were looking at a $185,000 transaction -- $165,000 for the home and $20,000 for the land.
We explained our situation and mentioned our concern that we would be unable to qualify for a mortgage loan to purchase the home. The salesperson said not to worry; he dealt with a loan officer at American Home Mortgage who could help.
We met with the loan officer and fully disclosed our situation. We had four children, everything we owned was in my name, and we had a modest income with some fairly substantial debts -- two vehicles on which we owed about $40,000, another home we owed $85,000 on, a parcel of land we owed $13,000 on, medical bills, and credit card balances. The loan officer explained that he would need to pull our credit and get back with us. When he finally called back, he informed us that although Joe's credit was a bit weak, I could qualify for the loan.
The loan officer explained that he could do a 30-year fixed-rate mortgage at 7.5 percent, which seemed a little high at the time. He also could offer us a fixed-rate mortgage at 2.25 percent that would change to a variable rate after two years. He told us that would give us time to sell our other house and refinance.
The loan officer helped us fill out the application. He asked for "stated income," and I told him that I earned $21,000 a year along with $900 in child support each month. The next thing I heard is that I was approved for the loan and the house was on order. American Home Mortgage would not do the construction loan, but Yorktown Funding would handle the loan for them.
The only sticking point was the appraisal. To close on the transaction, the appraisal of the property (land plus the house) needed to come in at $214,000. The first appraisal fell short, so Yorktown asked the appraiser to go out and find two more comparable properties to justify a higher appraisal. The appraiser followed instructions, but the appraisal was still too low. The salesperson then suggested changing the property's address -- the way the property was positioned on the lot, it could have either of two addresses. With the new address, the property appraised at $209,000 which did the trick.
Grading on the lot started at the end of March with delivery of the home scheduled for April 21, 2007. On April 21, the home finally arrived, ten hours late and with significant damage. The salesman informed us that while the home was being transported, one of the axles broke. As a result, the home was twisted. We tore the plastic off the home while everyone was still there, including the salesman and the setup crew. When we saw the damage, we asked the salesperson about sending the house back. He said he was going to call someone at Champion Homes, but we didn't hear another word about replacing the home. Because it was so late, the setup crew had to go.
The next day, the setup crew arrived and proceeded to place the house on the lot. It took Johnny, the four-person setup crew, Joe and his best friend the entire day to set the house. The crane had damaged the house around the top and sides.
To obtain money from the construction loan, the property needed to pass a series of inspections. The salesman never showed up for the inspections. He simply called me at work or called the setup supervisor or Joe to check up on the inspections and let him know when the property passed an inspection. I was supposed to be informed of each "draw" on the construction loan, but I never heard a word and had no idea where the money was going. In addition, the loan officer told me that the salesman was taking the setup crew off of my house to do other things so he could make even more money. On April 27, we finally closed on the construction loan with Yorktown Funding.
On June 13, the salesman asked for a final inspection, so we could close on the loan from American Home Mortgage. The house did not pass, due to drainage issues in the back yard and the fact that the garage was not wired and had no hand rail, the sheet rock was a mess, and other defects. The salesman ordered another inspection and informed us that the property passed this time and we could schedule the closing. The second closing was another fiasco, but we managed to muddle through it.
Two days later, and still nobody showed up to finish the work on the house. The salesman was not returning calls, and when we started digging up information, we found out that he had never paid the contractor who had done must of the work. I called the Manufacturing Institute and found out that the salesman was not a licensed contractor. I would need to contact the county where the inspections were done and the permit issued. When I called Gaston County, I was informed that the salesperson had taken out a surety bond for $5,000, because he wasn't a licensed contractor. I went by the next day to pick up a copy of the bond, and I contacted the representative at the insurance company that issued it.
I filed a complaint with the insurance company and never heard back from them. When I called, they said it was a "long process."
On August 1st, I received my first mortgage bill with a letter informing me that American Home was going bankrupt and they were selling my loan to EMC. As of August 20, 2007 EMC is who I would pay. The first bill had my payment at $757 from American Home. On August 20, 2007, I received something from EMC stating they would be handling my mortgage. The first payment was due on September 1, 2007. The statement showed something called "amortization" with four different payment types.
I then called EMC and told them this was not the loan I applied for. The person I talked with explained that they had no recourse at this time and that my closing attorney would need to go in front of a judge to have the loan declared null and void. I explained everything to my attorney. He said the case was over his head -- he didn't know what to do and didn't appear in front of judges.
I tried hiring another attorney, but nobody in Gastonia would take the case because the salesman's wife works for an attorney in town. I looked in a neighboring town but they declined, again because of some perceived conflict of interest. I called the Better Business Bureau, and they told me to get a lawyer. I called over 60 lawyers and no one helped. I finally met a friend who knows a good bit about my situation; she has been helping me.
We've come to find out that the salesperson had already been sued before, filed bankruptcy, and had over four businesses shut down by the Secretary of State for not fulfilling state requirements. I also discovered that my attorney had not filed all the paperwork correctly, the mortgage company falsified my income, and I had no insurance on my property because of mistakes that the salesman made. In addition, the appraisal showed that $3,000 worth of work still needed to be done.
I have tried to refinance but no one is willing to approve a new loan, because, given my debt-to-income ratio, I should never have been approved for the current loan I have. EMC will not tell me anything, except they will probably take the deed to my house and land. They don't want to help at all. I called American Home Mortgage and they still have all my documents but can't tell me who my lender or investor is and that EMC is my servicer. I have had two lawyers and neither one can do anything because American Home went bankrupt, and no one knows what to do.
Most recently, an attorney told me what I had already come to expect -- there's no hope. I don't want to lose my home, it is my family land and I have always dreamed of building on it before my grandfather passed away. If anyone can help me save my home please email me at email@example.com; we live in Cherryville, NC 28021.
This is just one story, but it is representative of what has been happening in every state in the Union -- professionals preying on homeowners who have been duped into trusting the system and the professionals who run it. It is the equivalent of going into a doctor's office and intentionally been diagnosed as having cancer. The "doctor" prescribes a host of expensive tests, medications, treatments, and therapies just to jack up your fees, and then flies out of the country when you're money runs out.
When you seek the advice of any professional -- a doctor, attorney, accountant, Realtor, or whoever -- you expect that the person is going to give you accurate information and reliable advice. You do not expect the person to flat out lie to you. We have to stop blaming homeowners for the current mortgage meltdown and start holding real estate professionals and lenders to the same standards we set for doctors and other professionals. We also need to start placing the blame where it belongs -- not with the homeowners but with the professionals who lead them astray.[Reality Times News]