Worker sues group over complaint of flipping homes

July 20, 2000|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

A loan officer for a mortgage company accused of financing property flipping with government-backed mortgages has sued a community organization for defamation and loss of income.

Fred Vanover, the loan officer for American Skycorp Inc., a Timonium company, filed the suit last week in Baltimore County Circuit Court against the Association of Community Organizations for Reform Now (ACORN), a citizen group that has been highly critical of the company. Mitch Klein, an ACORN organizer, is also a defendant.

The 14-count suit seeks $280 million in compensatory and punitive damages. It is similar to a suit filed in federal court in May by American Skycorp against ACORN, accusing it of defamation, causing a loss of business and retribution for the company's refusal to pay the group $200,000 to counsel borrowers.

The suits come at a time when American Skycorp faces problems on several fronts.

The U.S. Department of Housing and Urban Development is trying to bar the company's main office from issuing mortgages backed by the Federal Housing Administration because of the high default rate on its FHA loans, particularly those made in 1998, its first year of business. The company is challenging that action in federal court and has won a temporary reprieve.

Sources say the FBI and the Maryland attorney general's office are investigating the company.

Norma Washington, head of ACORN's Baltimore chapter, said the firm would fight the suit. "We've got documents to prove everything we're saying," she said.

In his suit, Vanover alleges that ACORN had accused him wrongly in a publicly circulated "position paper" of falsifying the mortgage application of a borrower and had demanded that American Skycorp fire him.

The 14-count suit also accuses ACORN of unfair and deceptive trade practices in seeking a contribution of $40,000 a year for five years from American Skycorp to finance the organization's loan counseling program. And, in an accusation joined by his wife, Vanover claimed that his "marital relationship has suffered."

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