Owners of a North Carolina real estate company that sold mobile homes and lots without clear titles have been ordered to stop the illegal practice and pay money that could help dozens of consumers.

“People bought a homeplace and made payments every month, only to find out that they could lose their home because of dishonest sellers,” said North Carolina Attorney General Roy Cooper. “Now we’ve put a stop to these illegal practices, and we’re going to continue working to try to help these consumers.”

The court found that Terri Hart and Jean S. Johnson of Cumberland County, North Carolina, violated the law when they could not convey clear title to the mobile home lots they were selling because lenders already held deeds of trust on the property. Hart and Johnson did not disclose these existing deeds of trust to the consumers who bought land and homes from them in Cumberland, Robeson, and Bladen counties, North Carolina.

Because of these deceptive practices, consumers faced foreclosure even though they were current with their payments or had paid for the property in full. At least three people were evicted from their homes due to foreclosure.

Cooper first filed suit in September 2003 against now-bankrupt RSJ Realty, which also did business as Carriage Crossing. Wake Superior Court Judge Leon Stanback entered a default judgment last week against the company’s owner/operators, Hart and Johnson, because they failed to respond to the suit.

Under the judgment, Hart and Johnson are permanently barred from selling property or assigning interest in a deed unless the property is free and clear of any outstanding deeds of trust. Hart and Johnson were also ordered to pay $697,532.16 to pay off deeds of trust and back taxes so that consumers who purchased homes and land through the company can have clear titles to their property.

RSJ Realty and Carriage Crossing operated in Hope Mills, North Carolina but are currently in bankruptcy. Lenders involved in the case have agreed not to foreclose on any consumers who purchased homes or plots of land from RSJ Realty until the bankruptcy case is completed.

The Attorney General’s Consumer Protection Division is monitoring the bankruptcy proceedings with hopes that consumers who did not receive clear title to their property may receive clear title after the bankruptcy. Cooper’s office will also attempt to collect the money that Hart and Johnson have been ordered to pay so that it can be used to help consumers get clear title to their land.