If Craig M. Meyer sold you on his idea of buying a home, chances you bought a bill-of-goods for $500 you couldn't afford to lose.
Breach of contract, fraud, misrepresentation, bait-and-switch, unfair trade practices and a plethora of other charges are among those levied by at least three state-level suits against Meyer and others who founded the Reno, NV-based National Affordable Housing Coalition.
From late 1996 to 1998, the NAHC barnstormed the nation, its seminars flush with evangelical zeal extolling the American Dream. Hotel ballroom seminar audiences were often packed with vulnerable, economically disadvantaged consumers who had previously found home ownership just out of their reach and decided to buy into the up-beat spiel to the tune of $500 a head.
Rendered insolvent by forced bankruptcy, NAHC has disconnected its phones, its attorney doesn't return calls and it likely will never make good on thousands of $500 promises of home ownership.
What's worse, the NAHC may be part of a new trend in real estate consumer fraud.
"Other companies are doing this same thing. You can turn on these infomercials, different companies, but they are saying 'We can get you a home.' Desperate people are lining up with credit cards," said Jeff Pollack an attorney with the Oakland, CA-based Robert A. Goldstein law corporation. Early in 1998 the firm filed a California class-action suit against the firm in Alameda (CA) County Superior Court.
In addition to the seminars, the coalition bombarded the airwaves with late-night get-a-home-quick infomercials, little more than pitches for the $10 seminars where NAHC pitched $500 memberships in a 12-month program to buy a home. The $500 so-called "earnest money" allowed consumers to work with NAHC's alleged affiliation of lenders and brokers until they were proud home owners.
But home ownership remained elusive for most.
NAHC hasn't responded to court suits' discovery requests for hard numbers and estimates vary, but at least thousands and perhaps as many as tens of thousands of consumers are out $500 -- and a dream.
The Washington Post reported by November 1997, more than 50,000 prospective home buyers had attended NAHC seminars nationwide, 7,000 had paid the $500 fee and about 275 (3.9 percent) had purchased homes with mortgages ranging from $76,400 to $143,407.
The Reno, NV Better Business Bureau said it processed 682 complaints before NAHC closed it's doors in June of 1998. Since then, 2,349 complaints have rolled in.
"We are not processing complaints any more because they are out of business. We still take names and addresses and are holding onto them in case the (Nevada) attorney general makes a discovery claim for the information," said a spokeswoman.
Nevada Attorney General Frankie Sue Del Papa said in that state's suit filed in Washoe County District Court March 1998, that as many as 20,000 consumers plunked down $500 for the NAHC memberships. Naming Meyer, Linda L. Meyer, and its chief financial officer, Scott Krieger, all of Reno, the suite also named non-Nevada residents Brian Wilkes, Rick Brown, David Shamey, Mark Gonzalves, and Augustine "Gus" Fernandez.
"The Bureau of Consumer Protection believes that some 15,000 to 20,000 memberships have been sold at $500 each. Of those, no more than 900 members are reported to have purchased homes and most of those did so without the help of the National Affordable Housing Coalition," Del Papa said.
In December, 1998, Minnesota's attorney general Hubert Humphrey III filed suit in Ramsey County District Court , naming Meyer and charging the company with using "bait-and-switch" tactics among other allegedly fraudulent activities.
Humphrey's investigation revealed that the company took in nearly $16,000 from Minnesota consumers, but he believes that's only a fraction the money consumers paid NAHC.
"Affordable housing is a pressing need, especially for low-income consumers," Humphrey said. "The last thing they need is to be stripped of their already limited funds through false promises of finding housing and bait and switch sales practices. Home ownership should be an American dream, not a nightmare of deception."
In other actions against the firm, Massachusetts' attorney general obtained a temporary restraining order against NAHC and two affiliated lenders, contending that NAHC was acting as a mortgage broker without the proper license.
Likewise, California's Department of Real Estate filed an order to desist and refrain that alleged the company acted in the capacity of a real estate broker without obtaining the required licenses.
The real estate media has been vocal too.
ABC-TV's 20/20 news program in December, 1998 took a telling camera inside a NAHC seminars. Local stations in Atlanta, GA and Oakland, CA also documented the events. The Washington Post and the Philadelphia Daily News, likewise, chronicled the coalition's raucous revivalist seminars.
San Jose Mercury News' legal counsel fired off a missive to Meyer demanding he stop using an events announcement of one of his seminars as an endorsement, several television stations banned Meyer's late-night infomercials from the air and one on-air creditor forced his bankruptcy when he refused to pay infomercial bills.
"To stop them is doing something, but to get the money back that's really doing something because they've refused to answer discovery and their attorney is not providing any defense that I'm aware of,'' said Pollack.
Sacramento, CA-based Glen Peterson, reportedly once handled NAHC's bankruptcy case, but calls to his office were not returned. Telephone numbers to Meyer's former office in Reno are disconnected and he did not respond to mail sent to the firm's original address.
There is a moral to this story.
If something appears too good to be true, it probably is -- and it could cost you.
Contact Nevada Attorney General's Bureau of Consumer Protection in Las Vegas at (702) 486-3769, in Reno at (702) 688-1958, or in Carson City at (702) 687-6300.
NAHC's bankruptcy case number with the Nevada District U.S. Bankruptcy Court is 9831565. Reach the court at (800) 294-6920.
The Minnesota Attorney General's office offers, "The Home Buyer's Handbook," and other realty-related consumer help, or by calling (800) 657-3787 or (651) 296-3353. The TTY number is (800) 366-4812 or (651) 297-7206.
"Advice for Consumers" is also available here on RealTimes.com.
U.S. Department of Housing and Urban Development-HUD and Fannie Mae's Home Path site also offer legitimate information at no charge.