Welcome to HickoryRecord.com. Skip directly to: our Keyword Search, Section Navigation, Content.

HickoryRecord.com - Hickory Daily Record

HomeNewsEntertainmentSportsLifestylesOpinionCommunityWeather Online Tools Jobs | Real Estate | Shopping | Classified

Attorney general moves to halt housing scheme

Related Links

From staff reports

Published: November 19, 2009

RALEIGH - An elaborate scheme deceived consumers in Catawba, Burke and Caldwell counties into buying overpriced manufactured homes and agreeing to loans they couldn't afford, Attorney General Roy Cooper says in a lawsuit filed this week.

Cooper won a temporary court order Wednesday against several defendants named in the suit. He is seeking to stop the scheme permanently and win back money for consumers.

The complaint filed by the attorney general on Wednesday names three companies as defendants, along with several of their employees and officers.

• Phoenix Housing Group, Inc. (Phoenix) sells manufactured homes and land/home packages and arranges financing for buyers. The company, headquartered in Greensboro, also does business as HomesAmerica and Southern Showcase Housing and has offices in Asheboro, Asheville, Burlington, Granite Falls, Greensboro, Hendersonville and Winston-Salem.

• K&B Homebuilders, Inc. (K&B) sells stick-built homes, modular home/land packages, and foreclosed homes in North Carolina. K&B was founded by a former Phoenix employee and currently employs several sales agents who used to work at the Phoenix store in Granite Falls.

• W.R. Starkey Mortgage, L.L.P (Starkey) of Plano, Texas, provided financing for consumers who bought homes from Phoenix between January 2007 and September 2008.

Both manufactured and modular homes are built in factories and then installed on lots. Modular homes are generally transported by truck and must meet state and local building codes. Manufactured homes can be transported on their own wheels and must meet federal building code.

Wake County Superior Court Judge John R. Jolly agreed Wednesday with Cooper's request to temporarily enjoin five defendants in the case from continuing their deceptive practices while the lawsuit moves forward: K&B, Roger Bailey, former sales manager at the Phoenix Granite Falls store and current owner of K&B; Yo Xey Her, also known as Joe Herr, former Phoenix sales agent and current K&B employee; George William Varsamis, a sales agent for Phoenix and K&B; and Travis Kanupp, officer and owner of K&B.

Approximately 10 consumer victims have contacted Cooper's Consumer Protection Division about the scheme. Affidavits from 11 consumers and former employees from Burke, Catawba, Caldwell, Randolph and Yadkin counties were filed with the complaint.

In addition to the temporary restraining order now in place against K&B, Bailey, Kanupp, Her and Varsamis, Cooper is asking the court for a permanent ban on all defendants from engaging in the deceptive activities alleged in the complaint, plus cancellation of consumers' contracts, refunds, and civil penalties.

Other individuals named as defendants in the lawsuit are: Gary Good, president of Phoenix; Dennis Parris, vice president of Phoenix; Dennis Setzer, former sales agent at the Phoenix Granite Falls store; Marina McCuen, who worked with Bailey to provide loans for customers of the Phoenix Granite Falls store; Ike Vinson, McCuen's supervisor with Starkey; and Kathy Smith, a licensed appraiser who conducted appraisals on land/home packages sold by Phoenix and K&B.

The Attorney General's Office worked with the N.C. Office of the Commissioner of Banks (NCCOB) in investigating the matter. NCCOB filed a separate administrative proceeding Wednesday against the mortgage lenders, brokers, and loan officers that originated the loans.