Mobile home business loses license

Monday, Aug. 13, 2001 | 10:50 a.m.

The mobile home dealership license of a Las Vegas manufactured housing firm has been revoked amid allegations that lenders were given false information about down payments to push through sales.

The Department of Business and Industry Manufactured Housing Division and the Nevada attorney general's office took the action against bankrupt Silver State Mobile Homes Inc. earlier this month.

However, Renee Diamond, director of the Manufactured Housing Division, said it is unclear how many purchasers were victimized or whether they will be able to collect from a $500,000 state fund established to satisfy proven claims of fraud to buyers of mobile homes, travel trailers and manufactured homes.

"Only purchasers of the homes are allowed to collect from the fund, no lenders," Diamond said. "We just don't know at this time if any purchasers (were defrauded)."

Last year the fund, which can reimburse up to $25,000 per case, paid $43,900 to people who were ripped off by mobile home dealers who did not live up to the promises made while either completing the sales or installing the homes. So far this year $41,460 has been paid to victims, none from the sale of Silver State Mobile Homes units, Diamond said.

"The enforcement action was prompted by allegations that Silver State Mobile Homes Inc. lost its place of business through a foreclosure sale and that its Clark County business license had expired," Deputy Attorney General Susan Gray said in a press release.

Diamond said state law requires that a mobile home dealer have a viable business address from which to operate.

Diamond said reports to her office alleged that the credit ratings of people purchasing Silver State Mobile Homes coaches were bolstered by loan applications that showed cash down payments much larger than the actual investments -- a practice called "dummy downs."

"Someone would put $500 down and the application would read that the down payment was $5,000," Diamond said. "The lenders didn't check it and instead relied on the dealer's word. As a result, there was a high number of foreclosures on many of these homes."

Dealerships receive the full purchase price of sales the lenders approve.

Attempts to reach Roger Croteau, attorney for Silver State Mobile Homes Inc., owners Robert Swick, Stella Swick and Marvin Weisberg, were unsuccessful.

Diamond said buyers of Silver State Mobile Homes may be reluctant to come forward to apply for reimbursement from the state fund for fear they could be implicated.

Gray said anyone who feels they were defrauded should contact Diamond's office at (702) 486-4135 for information about payment through the reimbursement plan.

The 2001 Nevada Legislature passed Assembly Bill 203 to strengthen the law related to the reimbursement fund, which formally is called the Account for Education and Recovery Relating to Manufactured Housing. The legislation was signed and became effective in May.

The changes to the law, among other things, included: