State Cracks Down on Mobile Home Sales Firm : Housing: The Santa Clarita company’s license is revoked. The D.A. will be asked to prosecute the owner on fraud charges.
Debra Meade might as well have thrown her $5,000 into the trash.
Seven months after putting a down payment on a trailer owned by Classic Mobile Homes of Santa Clarita, Meade, a single mother with two children, has nothing to show for it.
“That money is history, and I still don’t own a house,” said Meade, 39, an insurance underwriter who rents a house in Santa Clarita.
Prompted by complaints from Meade and two other mobile-home buyers, state housing officials have revoked Classic’s mobile-home sales license and will ask the Los Angeles County district attorney’s office to prosecute owner Gina Egyed on fraud charges, said Kymberly Pipkin, an attorney for the state Department of Housing and Community Development.
Egyed ran the mobile home dealership out of a Newhall office building with the help of her mother and a sister. Both previously had their sales licenses revoked by the state, the mother for defrauding customers and the sister for stealing from a department store, Pipkin said.
Egyed could not be reached for comment.
The agency has revoked or suspended the licenses of only about 24 of the more than 750 mobile-home dealers in the state in the past three years, Pipkin said. But it has a backlog of about 1,000 complaints because of a shortage of investigators, she said.
“There is a lot of potential for fraud in this business because people who buy mobile homes tend to be relatively unsophisticated, either first-time buyers or people who don’t speak English or who are on fixed incomes,” Pipkin said. “Those are the kinds of people Classic duped.”
Meade and others who lost their down payments or never received services they paid for from Classic may be reimbursed up to $40,000 through the state’s Mobile Home Recovery Fund. The $1.7 million now in the fund comes from fees paid by licensees and from transfer fees on the sale of mobile homes.
But to qualify for reimbursement, victims must first obtain a civil court judgment in their favor, often a lengthy and expensive process, Pipkin said. Then they are required to demonstrate that they attempted to recoup their losses from the seller, she said.
Meade, who is suing Classic, isn’t optimistic about getting her nest egg back quickly, if at all.
“I’ll be renting for quite a while,” she said.
The Classic saga begins in 1988, when the state revoked the sales license of Catherine Walker, the matriarch of the family business, Pipkin said. Walker and other members of her family who worked for Classic could not be reached for comment.
Walker lost her license because “she was found to have been regularly cheating people out of their money” while working in 1986 as a salesperson for the now-defunct Buy-rite Mobile Homes of Canyon Country, Pipkin said.
In one case, Pipkin said, Walker sold a mobile home that had been repossessed by Security Pacific Bank, and kept $14,000 by lying to the bank about the true sales price.
“She made out like a bandit,” Pipkin said.
But Walker did not face criminal charges because “banks are very reluctant to say they have been had,” Pipkin said.
In the meantime, one of Walker’s daughters, Gina Egyed, obtained a dealer’s license by taking six hours of classes and passing a state exam. She opened Classic Mobile Homes in January, 1987. Pipkin estimated that the dealership did a fairly brisk business, selling about 100 units annually.
Walker began working at Classic immediately after her license was revoked, in violation of state law, according to a February, 1991, report by an administrative law judge for the state housing department. But she was careful at first not to sign any sales documents filed with the state, Pipkin said.
By the beginning of 1989, two of Walker’s daughters, Reina Egyed and Elizabeth Walker, had lost their licenses to sell mobile homes after being convicted of petty theft in two separate incidents, Pipkin said.
Reina Egyed continued to work for Classic illegally after being convicted in Van Nuys Municipal Court in June, 1988, of shoplifting merchandise from a Nordstrom department store, according to the judge’s report.
A month after Reina Egyed was convicted, Jamie and Scott Snellings of Acton gave notice on their rented house and put a $2,500 down payment on a brand-new $64,000 mobile home from Classic. They also purchased an upgraded appliance package, including a side-by-side refrigerator and a swamp cooler for the double-wide trailer.
To close the deal, Catherine Walker let the Snellings live in a house that she owned in Acton while their mobile home was shipped and assembled. But when the couple finally moved into the Acton Country Mobile Home Park in the fall, much of the work on the trailer had not been done, according to the administrative report. Among other things, the swamp cooler hadn’t been installed, the doors were improperly hung and the kitchen contained a smaller refrigerator than the one the Snellings had bought.
At first, the Snellings, a young couple from a North Carolina town of 500 residents, were gracious about the problems. They agreed to pay $500 extra for the beige refrigerator in their kitchen, although it was included in the original purchase price of the mobile home, the judge’s report said.
They finally complained to the state last May after calling Classic more than 60 times and still not getting all the work done, according to phone records.
“We thought they were our friends at first--we should have known they were too nice,” said Jamie Snellings, a 28-year-old nurse.
But the state did not immediately begin investigating Classic because it had a backlog of more serious complaints than the Snellings’, Pipkin said. Normally, it takes five to six months to get an administrative hearing date on a complaint, she said.
The investigation was expedited, however, when Meade, the single mother, complained that Classic refused to return her $5,000 down payment.
Then, “it was apparent that the public was in jeopardy from Classic,” Pipkin said.
Shortly after Meade complained, the state heard from another Classic customer, Leticia Mateo, a Santa Clarita teen-ager who had tried to help her Spanish-speaking parents buy a mobile home.
Her parents, Faustino and Juana Mateo, who could not be reached for comment, gave Classic an $8,100 down payment on an 8-year-old, $48,000 mobile home. Classic never deposited the money into an escrow account and refused to refund the couple’s money when Bank of America denied their loan application, the judge’s report said.
After completing its investigation, the state took the unusual step of suspending Classic’s license in January before a hearing was held, because of potential economic harm to consumers. After the hearing, Gina Egyed’s dealer’s license was permanently revoked last month.
TIPS FOR MOBILE HOME BUYERS * Make sure the dealer and salespeople are licensed. State law requires them to prominently display their licenses on a wall. * Insist upon making your down payment check payable to the escrow company directly, rather than to the dealer. State law requires the dealer to deposit the down payment in an escrow account within three days. * If you are buying a used mobile home through a dealer, make sure the owner of the trailer signs a copy of your “offer to purchase.” Otherwise, you could end up paying far more than the seller’s price, with the dealer pocketing the difference. * Never sign any blank documents and get a copy of everything you sign. * If you have been defrauded, the state may be able to reimburse you for up to $40,000 of your losses through the Mobile Home Recovery Fund. For more information, call (800) 952-5275.
