As a follow-up to a blog entry I made back on the 27th of February, the South Carolina Manufactured Housing Board yesterday revoked the licenses of three manufactured home dealers who provided fraudulent information on buyers’ loan applications.

According to The Sun News, the Board permanently revoked the licenses of Henry Curtiss and Charles Michael Roy, who worked as salesmen for Beach Homes Corp. Both Curtiss and Roy signed agreements to surrender their licenses and waive a formal hearing, while Beach Homes Corp. owner Randy Conner waived a formal hearing and will have 60 days to surrender his license.

Click here for the entire Sun News article.

Yesterday’s announcement comes of the heels of one prominent South Carolina attorney going record with The Sun Times as stating that fraud is so rampant among the state’s manufactured home dealers that any real estate professional who refuses to participate in generating fraudulent deals puts themselves at a competitive disadvantage. As I’ve pointed out before, South Carolina’s Consumer Affairs Department has just five investigators overseeing nearly 750 mortgage brokers statewide, as well as thousands of other businesses across the state, so it’s nice to finally hear that the Manufactured Housing Board is stepping up to the plate to help put a stop to South Carolina’s widespread real estate fraud problem.

A lawyer in South Carolina lawyer says real estate fraud is so rampant among manufactured-home dealers in his state, that any real estate professional who refuses to participate in generating fraudulent deals puts themselves at a competitive disadvantage. According to a news article in yesterday’s The Sun News, South Carolina has the highest concentration of manufactured homes in the nation (about 20 percent), and real estate fraud–namely the kind that involves mortgage brokers, not consumers, falsifying income and bank account information in order to secure loans for their customers–is out of control.

From yesterday’s Sun News:

Mortgage Fraud Tension Ratchets Up

Mortgage fraud in Horry County’s manufactured home industry, once a whispered topic of conversation among some in the real estate community, has caught the attention of state agencies and real estate groups, which vow to crack down on the problem. Cleaning up the industry, however, has proved to be a difficult process for short-staffed state agencies charged with protecting the public.

Home buyers who say they’ve been taken advantage of are frustrated with the limited help that’s available and what they perceive as a lack of progress on their cases.

“I’ve talked with a lot of attorneys, and no one will touch my case,” said Robert Romaniello, a Conway man who says he was asked to take part in a fraudulent mortgage. “They say it would cost me more in attorney’s fees than what I could get. It’s not worth it to them. And I’m not sure the state agencies are even taking it seriously. I keep getting passed around from agency to agency.”

Investigators with the S.C. Department of Labor, Licensing and Regulation talked with Ed and Hanna Hudzik about their mortgage problems in December. The investigators also took the couple’s loan documents to Columbia. “We haven’t heard a thing from them since then,” Hanna Hudzik said. “They haven’t even returned the papers we let them borrow.”

David Bennett, administrator for the state’s Manufactured Housing Board, said his agency wants to crack down on fraud, but investigations are rarely quick or easy. The housing board, a division of the state’s LLR department, has two investigators who specialize in fraud cases, Bennett said. They oversee about 300 manufactured home sellers statewide.

Click here for the rest of the article, which goes on to mention that South Carolina’s Consumer Affairs Department has just five investigators to oversee nearly 750 mortgage brokers statewide, as well as thousands of other businesses across the state, including pawn shops, health clubs, continuing care retirement communities, and staff leasing companies.

The size and scope of the real estate and mortgage fraud problem is incomprehensible when you hear about figures like these… five (5) investigators for seven hundred and fifty (750) brokers, or one hundred and fifty (150) brokers per investigator, and as the article points out, SC’s Consumer Affairs investigators cover more than just mortgage brokers.

Can you imagine being a consumer affairs investigator in South Carolina… on Monday you investigate complaints about the policies associated with canceling health club memberships, and then on Tuesday you’re knee-deep into the complexities related to potentially fraudulent mortgages. Unbelievable. When will states like South Carolina wake up and smell the coffee?

At the very least, South Carolina’s Consumer Affairs Department web site should warn consumers about fraudulent mortgage brokers… as opposed to using valuable space on the front page of its site to warn mortgage brokers about originator application deadlines (and no, I’m not making this up… click here to see for yourself!).