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Couple Tells Familiar Tale of Apple Tree: Augmented Account for Mortgage Claimed

Posted on: Sunday, 18 December 2005, 12:00 CST

By David Wren, The Sun News, Myrtle Beach, S.C., The Sun News, Myrtle Beach, S.C.

Dec. 18--Shirley and Russell Parker once thought so highly of Apple Tree Housing that they appeared in a TV commercial for the manufactured-home dealer.

These days, when the Parkers drive by the nearly empty Apple Tree home lot on U.S. 501, "we stick our tongues out at it," Russell Parker said.

The Parkers say Apple Tree deposited $30,000 into their bank account and included misleading information on their mortgage documents, thus making it appear to a mortgage company that they had cash for a down payment and loan fees.

Apple Tree closed three months ago, owner Chris Barnhill said, "because financing for manufactured housing has dried up."

Wells Fargo Home Mortgage gave the Parkers a $108,000 loan on their 2,000-square-foot double-wide home in October 2002.

Barnhill denies the Parkers' allegations and says he had nothing to do with financing the homes he sold.

"If the buyers have done this stuff, they need to be taken to court and prosecuted," Barnhill said. "They have defrauded the lender, which is punishable by up to 20 years in jail."

Another couple, Louis and Robyn Greco, have accused Apple Tree and Barnhill in a lawsuit of inflating the value of their home with a fraudulent appraisal and putting $26,000 into their bank account to make it appear they had cash for a down payment. Barnhill denies those allegations. A trial date has not been set.

Consumer experts say Horry County's hot housing market has fueled growing concerns about mortgage fraud, especially as it relates to manufactured homes.

Inflated home appraisals and prices, falsified down payments, false second mortgages purportedly used to pay closing costs and misleading information on loan applications are among the common practices in such schemes, experts say.

David Bennett, administrator of the state's Manufactured Housing Board, said his office received a complaint this month against Apple Tree, but he can't investigate the complaint because the home seller has closed.

"The worst we could do is take away their license, and they're already closed, so there's no further sanction to take," Bennett said. "We've flagged him [Barnhill] in the licensing system so he can't get another license."

Rising mortgage payments

The Parkers say they have struggled to make their mortgage payments ever since buying their land-and-home package in Aynor in October 2002. The contract price for the land-and-home package was $135,000, with $27,000 going toward the land and $108,000 going toward the home.

Loan documents list the seller as Jimmy Lee Hucks. Hucks said he owned the land and Apple Tree sold the house. Hucks said he let Apple Tree handle the sale so the Parkers' mortgage would cover both the land and home.

"I let the deal go through them [Apple Tree] because the land-and-home packages have to be on one loan," Hucks said.

The Parkers say they have watched their mortgage payments increase from $839 a month to $1,114 a month over the past three years, the result of an adjustable-rate loan tied to increases in federal interest rates. The Parkers' mortgage interest rate now is 9.6 percent and is adjusted every six months.

"We live paycheck to paycheck on a pension and Social Security," Russell Parker said. "We're making the payments, but it isn't easy."

The Parkers tried to refinance their home in September to get a lower, fixed-rate mortgage, but two appraisals showed the Parkers' home was worth less than what they owed on their current loan.

"We were shocked," Shirley Parker said. "The appraisal when we bought the house came in at $135,000, and the highest one we got in September was for $74,000."

The Parkers say they bought their house, in part, because they thought it was worth the amount Apple Tree Housing claimed. The Parkers say they will pay thousands in extra interest payments because they can't refinance their home.

A familiar story

The Parkers said they decided to investigate details of their loan after learning about the appraisal discrepancies and reading reports in The Sun News about Apple Tree Housing.

The Parkers say Apple Tree deposited $30,000 into their bank account Sept. 26, 2002, to help them qualify for their home loan. They say Apple Tree reclaimed the $30,000 after the Parkers' mortgage was approved from money that was distributed at their loan closing two weeks later.

"Apple Tree gave us a $30,000 check to put in our bank," Shirley Parker said. "They said, 'Put it in your account, but don't spend it.'"

Bank records show a cashier's check for $30,000 was purchased at a BB&T bank in Conway. The check was payable to Russ Parker and the purchaser was listed as Apple Tree Housing.

After the deposit had been made, the Parkers say they got a statement from their bank showing their five-figure account balance and gave that statement to Apple Tree.

"They said they needed it for our mortgage company," Shirley Parker said. "They were all very nice, and we didn't know any different."

The Parkers' loan papers show the couple made a $27,000 down payment on their home on Valley Forge Road. The documents also show the Parkers paid $26.91 for county taxes at the loan closing.

The Parkers say they didn't put any money down on the home.

The only thing the Parkers brought to the loan closing, they said, was a pair of cashier's checks totaling $30,000, purchased with the money Apple Tree had deposited into their account. One of those checks, for $2,394.64, was made payable to Apple Tree. The other check, for $27,605.36, was made payable to the Williams Law Firm.

Brana Williams, the closing lawyer, said she collected the cashier's checks and loan proceeds and distributed them to the seller, appraiser and others who were owed money in the transaction. The Parkers were listed as the purchasers of the checks, and Williams said she had no reason to think the money wasn't theirs.

"I was not aware that the money was anyone's but theirs," Williams said. "If I had any indication that they were misrepresenting something, I would have had an obligation to stop so the settlement statement is reflected accurately."

Place to call home in trouble

With escalating monthly payments and a mortgage they can't escape, the Parkers say they worry each month about keeping their home.

"One of the reasons we bought this place is because my husband has emphysema and the house is close to our son and his wife," Shirley Parker said. The Parkers' son lives in a home on an adjacent lot.

"We always wind up making the house payment late because of how we get paid from pensions and Social Security, so we always have late fees," Shirley Parker said.

Those late payments trigger inspections by Wells Fargo, which sends contractors to drive by the Parkers' home to make sure it hasn't been abandoned. The late fees and inspection fees add about $100 a month to the Parkers' payments.

"They want to make sure we're still living here, and they charge us for that," Shirley Parker said. "They call it an inspection fee, but the person doing the inspecting doesn't even get out of his car."

The Parkers say their home-buying experience has changed the view they once had of Barnhill and Apple Tree.

"They even asked us to be in a commercial for them," Shirley Parker said. "I remember one of the things I had to say in the commercial was, 'There isn't a bad apple on the lot.' Isn't that silly?"

Russell and Shirley Parker said they didn't receive anything for their work in the commercial.

Contact DAVID WREN at 626-0281 or dwren@thesunnews.com [mailto:dwren@thesunnews.com].

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Copyright (c) 2005, The Sun News, Myrtle Beach, S.C.

Distributed by Knight Ridder/Tribune Business News.

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Source: The Sun News (Myrtle Beach, S.C.)

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