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Raleigh, NC Appraisal Firm/Appraisers sued.

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North Carolina
Gupton, appraisers sued in Vance


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By MICHAEL JACOBS, Daily Dispatch News Editor

Two residents of Key Estates, a Creative Real Estate subdivision, have filed the second Vance County lawsuit against the Donald Gupton-owned mobile home business.

Unlike the first lawsuit filed in the county, this one names Gupton as an individual, as well as citing his businesses. In addition, the Raleigh-based appraiser on the home, Elbert Byrd Jr., his boss, Phillip W. Ford, and their firm, Ford & Associates Appraisers, are defendants.

Robert and Jennie Taylor bought a land-home package from Creative in the fall of 1999 under what they claim was a deal rife with lies and fraudulent actions.

They are making three general claims for relief: unfair or deceptive trade practices; intentional misrepresentation and fraud; and negligent misrepresentation.

Their lawsuit, filed Monday by attorney Steven DeCillis, is just the latest legal challenge for Gupton, who owns Creative, Dynasty Homes and Superior Housing Center.

Gupton did not return a phone call seeking comment.

On the strength of far more than 100 complaints collected by the Vance County NAACP and forwarded to the state Fair Housing Agency and the Attorney General's Office, state Attorney General Roy Cooper has filed a lawsuit in Wake County that seeks to gain restitution for all of the victims and to put Gupton out of business.

Cooper is seeking a preliminary injunction to stop Gupton from selling any more manufactured homes, and spokesman John Bason said he expects that motion to go to court soon.

Charlotte's Wall Law Firm has filed several cases on behalf of individual Vance clients in U.S. District Court in Raleigh.

The cases all draw a picture of inflated appraisals, predatory lending, false statements on federal housing forms, misleading deals and broken promises.

The Taylors' case, as laid out in their lawsuit, features most of those elements.

The Taylors say they met with Creative sales agent David Allen around August 1999 and told him upfront they could pay only $500 to $600 a month for a house.

Allen told them their payments would not exceed $550, the lawsuit says, and the two sides made a deal Sept. 15, 1999. The agreement included a promise that the home dealer would pay off the Taylors' existing debt, the filing says.

In their 31 assertions of fact in the case, the Taylors claim that problems began soon after the deal and continued through the closing in December.

Among the couple's allegations are that they never received the legally required good-faith estimate of closing costs, never were provided an appraisal before the closing, did not get a list of the terms of the contract in advance, had to use an appraiser and a closing attorney selected by Creative, and qualified for the loan largely because Creative listed a $10,500 down payment on the HUD settlement form. The Taylors say they paid only $500.

The sale price was $90,069.91, and the loan was for about $92,000 with a variable interest rate that started at 9.97 percent and rose over time. Instead of $550 a month, the Taylors found that they had to pay $790.37, and the payment increased to $947.66.

"The plaintiffs questioned the change in the terms, but Mr. David Allen and defendant Gupton assured the plaintiffs that they could receive a lower payment by refinancing with a year," the lawsuit says.

It says the couple tried five times to refinance but were rejected because their home "was grossly over valued by the defendants."

According to the lawsuit, Byrd valued the land-home package at $108,000, and Ford approved that finding.

When DeCillis had a Warren County appraiser assess the property's value last year for the lawsuit, the appraisal came back at $49,200.

The lawsuit says the Ford & Associates appraisers lacked the necessary knowledge of the Vance County market and made little or no effort to account for that lack of experience. It also says the appraisers "intentionally or negligently" relied on the values of comparable properties that Creative placed with the Multiple Listing Service solely to overstate the value of the package.

Ford was out of the office and unavailable to comment on the lawsuit late last week, and Byrd no longer works for Ford & Associates.

The Taylors have avoided foreclosure and bankruptcy, the fate of many Creative home buyers in Vance and neighboring counties. They still live in the house.

"They're working several jobs to keep their home," said DeCillis, who also filed the first Gupton lawsuit in Vance County.

They are seeking in excess of $10,000 on each of four allegations, plus punitive damages and legal fees.

DeCillis said a key part of the lawsuit is that Gupton is named as an individual, not just as the owner of Donald Gupton Inc. and associated businesses.

The use of the statute on unfair trade practices allows individual employees of the companies to be sued, DeCillis said.

Meanwhile, the United Community Foundation, a new group led by former Vance NAACP President Deryl von Williams, drew 119 complainants to a meeting Jan. 21 to sign a retainer for a Durham law firm to sue Gupton.

Williams said her organization is helping those homeowners get their paperwork together for lawsuits and trying to ensure they aren't ripped off in the world of law as they were in the world of real estate.

Since the attorney general filed his complaint in mid-January, she said, the victims of Creative are like a helpless baby with a big insurance policy: "Everybody wants the insurance policy. Nobody wants the baby."

She said the Durham law firm retained, Couch and Paibi, likely will file multiple lawsuits on behalf of groups of victims whose cases share certain elements.

DeCillis, who continues to consult with clients complaining about Creative, is open to, but not pushing for, class-action status or consolidation of the various lawsuits against Gupton in state courts.

"I'm prepared to handle the case no matter where it goes," he said.

The writer can be reached at [email protected].
 

Tim Hicks (Texas)

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Texas
I am amazed this does not happen more often and it should!
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
A week or two ago I talked to a private attorney familiar with this suit. He said he had around 200 cases he was looking at similar to this.

The gentleman evidently is good at this type case as he is getting calls from folks who have complained to consumer advocacy groups.

It appears that most of this situation revolves arond manufactured homes.

May justice be done and if in fact folks are guilty may they be punished to the fullest extent of the law.

The consumer groups have taken notice of the appraisal problems involved in some of this shady lending/selling/refinancing stuff.

I suspect 2003 and will see this become commonplace.
 

Austin

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Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
The thing about this that scares me is that these suits shows that the bottom feeding lawyers have discovered a new set of deep pockets; the real estate industry with its E & O Insurance covered practioners. I knew that sooner or later it would happen. They have about bankrupted the health care system, tobacco industry, and every other industry in the country so I guess it is our turn. I talked to a person that works for a developer of manufactured home subdivisions and he said the bottom has fallen out. Can’t give one away. They have 20 in one subdivision all less than 2 years old and you can take your pick at $1,000 down and take over payments. No takers. I know a county in NC that has a big contract for deed scam going on. Land prices have tripled in the last five years. All of this right under the noses of the NCAB too. Ever try to explain to an idiot how contract for deed prices affect price?
 

USPAP Compliant

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Certified Residential Appraiser
State
North Carolina
By MICHAEL JACOBS, Daily Dispatch News Editor

North Carolina Attorney General Roy Cooper filed a motion Monday for a preliminary injunction against Vance County mobile home mogul Donald Gupton and his assorted businesses.

The motion, filed in Wake County Superior Court, comes three weeks after Cooper filed a lawsuit that aims to shut Gupton down and to force him to refund thousands of dollars apiece to potentially hundreds of defrauded customers.

The filing offers the first detailed glimpse at some of the evidence against Gupton, including affidavits from former customers, a Creative salesman and an investigator for the state Real Estate Commission.

The preliminary injunction asks that the court force Gupton individually and Donald W. Gupton Inc., doing business as Creative Real Estate, Superior Housing and Dynasty Homes of Henderson, to stop:

-- Entering into sales contracts with customers who can't honestly qualify for financing.

-- Making false promises to get people to buy mobile homes.

-- Falsifying loan applications and other financial information.

-- Getting customers to submit false gift letters to obtain financing.

-- Misrepresenting the amount or source of down payments.

-- Playing any role in inflating the appraisals on homes and land sold to consumers.

-- Failing to give timely, proper disclosures of loan terms and costs.

-- "Destroying, concealing, transferring, erasing or otherwise disposing" of any records related to the financing of manufactured homes and real estate.

The state, represented by Cooper and three of his assistants, also wants Gupton and his companies to produce records of all assets and liabilities worth $10,000 or more that have been sold or transferred since Jan. 1.

The cumulative effect of the paperwork and scrutiny could shut down Gupton while the state pursues its case against him. It is one of an increasing number of civil lawsuits against Creative and its owner, including at least three in federal court in Raleigh and two in state court in Vance County.

The four affidavits from Creative customers tell a now-familiar story of false promises and manipulative sales techniques, the kind that have produced more than 100 complaints from Vance residents to the state Fair Housing Agency.

In case after case, customers who had bad or no credit report being drawn into deals with Creative in which they were told that their old debts would be paid off and that they would have affordable payments, usually between $500 and $650.

At closing, the customers would find monthly payments set hundreds of dollars higher. According to the customers' statements and that of part-time Creative salesman Angelo Rudolph Terry Sr., the inevitable response was that the buyer just had to make due with the payments for a year, then could refinance to a much lower rate.

That refinancing rarely worked, either because of the buyer's credit history or, frequently, because the mortgage lender decided that the home was overvalued on the appraisal.

To get for the original loans, some customers said they were told to file phony gift letters.

Edward Evans, for instance, testified that his father-in-law, Willie H. Davis Sr., signed a statement that he had given Evans' wife, Angela, $22,000 toward a home purchase. "In fact, my father-in-law did not give any money to us."

Other customers said they were given credit for trading in a home they never owned. Real Estate Commission investigator Gary Caddell documented the title transfer of one 1995-model home nine times in 17 months, beginning with Gupton Inc. and ending with a Creative salesman. Caddell says some of the people involved in the transfers knew nothing of the home and said their signatures were forged.

Caddell said the first complaint against Gupton came Oct. 3, 2000. Numerous other complaints led him to open a field investigation in July 2002.

The writer can be reached at [email protected].




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