Consumer-Related News Releases

Friday, March 17, 2006

Attorney General Abbott Reaps Sweeping Industry Changes In Sales Of Repossessed Manufactured Homes

Green Tree Servicing implements numerous remedies; two unlicensed retailers sued for exploiting consumers

AUSTIN - Texas Attorney General Greg Abbott today reached a landmark agreement with a major debt servicing company in what is expected to result in far-reaching implications for several business practices within the manufactured home industry.

Green Tree Servicing L.L.C., a Minnesota firm specializing in debt servicing of manufactured homes in Texas, has agreed to assist more than 1,200 homeowners who may have been issued invalid titles to homes they purchased from more than 115 unlicensed retailers in 2003.

Media Links
Attorney General's agreement with Green Tree Servicing
Attorney General's lawsuit against unlicensed manufactured home dealers
Attorney General's lawsuit against unlicensed manufactured home dealers

“For too long this industry has had an underlying black market that, step by step, is being eradicated,” said Attorney General Abbott. “Many first-time homeowners have been saddled with tens of thousands of dollars in debt and ended up without homes or legitimate titles.

“Today’s agreement should serve as a model for debt servicing companies and lenders in this industry so that these new policies will begin to dry up the inventory of repossessed homes that fall prey to unscrupulous practices.”

Parallel to this agreement, the Attorney General has filed two lawsuits in Bexar County against unlicensed retailers who schemed to exploit consumers. One suit names Andrew and Edward Huizar, dba A&E Investments, and David Barroso, dba Sweet Mobile Homes. The other suit names Mario Montalbo and Anna Saenz, dba Diamond Homes.

The Huizars, Montalbo and Saenz acquired many of these homes, then illegally sold them to many victims. Barosso, who previously had been licensed and had illegally “rented” his license to the Huizars, has now surrendered his license. The lawsuits are designed to fix title problems and refund money to consumers who were gouged.

In addition, Bexar County District Attorney Susan Reed has obtained a felony indictment against Michael Acosta, owner of First Choice Mobile Homes, for defrauding a victim of $22,000. As part of the overall agreement, Green Tree has agreed to reimburse the money wrongfully taken by Acosta.

In 2004 the state began to investigate sales of thousands of repossessed or abandoned manufactured homes whose owners had defaulted on monthly payments. Instead of repossessing the homes and moving them to bonded locations run by licensed sales retailers, Green Tree often allowed the homes to sit idle on the previous homeowners’ lots and wait for licensed manufactured home retailers to make offers to buy them and move them for legitimate sales.

Because of a lack of background checks by the company, unlicensed retailers had been buying repossessed homes and reselling them “as-is” to unwitting consumers without required disclosures about the homes. Some homes had been illegally sold in uninhabitable condition with overdue taxes and unpaid lot rents outstanding against them. These unlicensed retailers also sold many homes using a “bill of sale” instead of a proper title known as a “Statement of Ownership and Location,” which must be registered with the Manufactured Home Division and which serves as the official record of ownership and outstanding liens.

Working with the Attorney General’s San Antonio Consumer Protection Division office, Green Tree responded by instituting new policies to ensure it has no further dealings with unscrupulous, unlicensed individuals who purchased Green Tree’s repossessed homes. The new practices will protect consumers by requiring that all sales be handled licensed retailers, who are bonded and regulated.

“These practices still occur on a daily basis throughout Texas with other lenders, unlicensed retailers and installers. This agreement, the two lawsuits and the criminal indictment serve notice to the manufactured home industry that you must reform now, or face similar legal actions,” warned Attorney General Abbott.

Consumers may be eligible for assistance from Green Tree Servicing if: (a) they purchased a manufactured home from an unlicensed retailer in Texas during 2003, (b) the home had been repossessed by Green Tree and sold to the unlicensed retailer, and (c), the consumers had difficulty obtaining clear title to the homes, or did not receive required warranties or disclosures. They may obtain a questionnaire concerning their purchases by calling or writing to Green Tree at:

7800 IH-10 West, Suite 200
San Antonio, TX 78230
800) 292-7413

Consumers may also contact the Manufactured Housing Division of the Texas Department of Housing and Community Affairs at:

221 E. 11th St.
Austin, TX 78701
800) 500-7074
512) 475-1174