Family Sues Local Companies for Fraud

Sep 26, 2007 | News

Veronica Castelo, News 8 Austin

Melvin Manor likes to sit outside his home in East Austin with a few friends and family members. He grew up in the home on Pennsylvania Street. It originally belonged to his father, Burley John Manor Sr.

Manor said the home has always been a place people like to visit.

“This is where family gathers. All of our kids all gather here. This is our homestead and that’s why we want to keep it,” Manor said.

Burley John died in December 2004. Right before he died, Melvin said a representative from Elder Solutions, L.P approached his dad.

David Grady runs Elder Solutions, L.P., a reverse mortgage consulting agency.

“The goal of the company is to act as a coordinator between senior citizens and lenders that do the reverse mortgage program,” Grady said.

In the most simple terms, a reverse mortgage is a loan against the home that the homeowner doesn’t have to pay back as long as they live there. It’s only available to people over 62.

Grady said Burley Manor’s house needed to be repaired to better his chances of getting a reverse mortgage loan. Grady said he gave him authority to do whatever it took to prepare his home for the loan process.

“We go out and find contractors who will bid the jobs for the repair,” Grady said.

Grady contracted Chaparral Ceiling and Wall, Inc. to do an estimated $70,000 worth of repairs. The result was a legal mess.

Burley John Manor Sr. never got the loan he was promised. But even though the loan never materialized, contractors with Chaparral Ceiling and Wall, Inc. began to make repairs without permission, according to Melvin Manor.

Joe Chapa, the owner of Chaparral Ceiling and Wall, sued Manor’s estate for non-payment of nearly $70,000 in November 2006. Chapa declined an on-camera interview for this article. He said all he’s ever done is fulfill the agreements set forth by Elder Solutions, L.P.

Burley Manor’s family is making counterclaims to save their father’s home in a lawsuit filed Monday at Travis County Probate Court by their attorney, Joe Marrs.

“They were using forged powers of attorneys and were doing some other things that were plain fraud,” Marrs said.

The lawsuit states Elder Solutions, LP “solicited and exploited elderly homeowners.” The suit claims the two companies use a “two-step scheme.” First they “bait the homeowner with promises of cash and improvements” and then they “commence major demolition” – trapping the homeowner into selling their property to pay the debt.

Chapa and Grady deny the claims. Both companies have satisfactory ratings with the Better Bureau Business and neither have complaints on file at the Texas Attorney Generals’ Consumer Division.

Trish McAllister of Volunteer Legal Services of Central Texas referred Manor’s case to Marrs. McAllister said Manor’s story is one of many she’s heard involving reverse mortgages, mechanics liens, and foreclosures.

“There’s different areas that have historically been low-income
areas. The property values have increased in the past two years so we’ve seen this incredible increase in scams in those areas. They have targeted particular individuals. Usually it’s the elderly,” McAllister said.

Barbara Nichols-Manor said that happened to her father. Marrs is in the process of filing a lawsuit on her behalf.

Nichols-Manor, who is married to Melvin’s brother, said her father was another of Elder Solutions’ customers, and his home also fell under the hammer of Chaparral Ceiling and Wall, Inc.

“They destroyed my daddy’s house. They did. It’s not livable. Next thing you know, they tell you they have a lien on your house,” Nichols said.

Scott Norman is the president of the Texas Association of Reverse Mortgage Lenders.

“Certainly anyone who is working with a contractor or is offering
to do it for a fee would not be something we recommend,” Norman said. “You need to go to a reverse mortgage lender who is reputable. Maybe someone who is HUD approved.”

Grady is not HUD approved, however, because he is a consultant and not a lender, he is not required to be HUD approved.

Furthermore, Grady said his company has helped more than 400 people with their mortgage loans throughout the state. Grady said he is only paid when his clients get the the loan.

“For a group of citizens that are the most maligned and taken advantage of people in the entire country, here’s a chance for them to improve their quality of life while they are still living,” Grady said.

Nichols and Manor say their quality of life has yet to improve.
They hope their legal battle prevents others from having to fight for their parents’ homes, too.

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