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Fraudulent Manufactured and Modular Home Sellers Brought Down

Updating a story MHProNews published Aug. 13, 2013 regarding North Carolina-based Phoenix Housing Group (PHG) fraudulently selling over 1,000 manufactured and modular homes, several of the principals have been banned from the mortgage business and/or from the MH and modular industry, and fined, while others await sentencing. The charges involved deceiving consumers into buying overpriced manufactured homes (MH) and agreeing to loans they couldn’t afford based on falsified credit reports. NC Attorney General Roy Cooper originally filed suit in 2009 against Phoenix, K&B Homebuilders, and W.R. Starkey Mortgage, LLP of Plano, Texas who provided financing for the scheme, as well as several individuals.

Consumers were drawn in by promises of manufactured homes for $500 down, but at closing they were informed their monthly payment would be several hundred dollars more. If they balked, they could exit the deal by paying $2,000 to $5,000, more than most could afford, and many lost their homes. 165 victims who financed through Starkey received refunds of $26,000 each, totaling nearly $4.3 million.

Ike Vinson, a loan officer with Starkey, is banned from the mortgage industry in NC. Phoenix sales agent Dennis Setzer is banned from the factory-built home business in NC and must pay penalties of $125,000, $5,000 for each of the fraudulent deals he engineered. Former Phoenix sales agent Joe Herr was ordered to pay civil penalties totaling $220,000, $5,000 for each of the 44 fraudulent land/home packages he sold. Phoenix President Gary Lee Good is banned from the MH/Mod industry in NC for five years and is subject to a $100,000 fine if he violates the ban. Starkey is permanently barred from making loans when a manufactured housing dealer is a party to the transaction. According to jdnews.com, Cooper worked with the U. S. Attorney General’s office and with the Commissioner of Banks in breaking the case. ##

(Photo credit: thetimesnews.com–Burlington, North Carolina manufactured home)

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