Maryland's attorney general ordered yesterday two affiliated Baltimore-area homebuilders and their executives to pay more than $600,000 to seven customers for taking their money without completing their homes.
The cease-and-desist order bars JAE Developers of Owings Mills and JAE Homes Inc. of Baltimore and their executives, Kimberly Zahrey and Walter Osborne Ely Jr., from building more homes in Maryland and requires them to pay customers $605,362.
An attorney for Zahrey, of Baltimore, said his client plans to cooperate with the office of the attorney general "to ensure that the whole truth comes out and that the matter is effectively resolved."
Ely, of Baltimore, could not be reached for comment after repeated attempts yesterday.
"We have filed the necessary papers to stop them immediately," Maryland Attorney General J. Joseph Curran Jr. said. "The largest investment a consumer will ever make in their lifetime is their dream home. When they save their money to build their dream home and somebody unscrupulously takes that money and destroys that dream, we are going to go after them big time."
A state official involved in the investigation said he expects more JAE customers to file complaints with the division before a public hearing in the case, scheduled for Nov. 30.
"We are aware of other consumers," said Jeston Hamer Jr., assistant attorney general and director of the state's homebuilder registration unit.
Attorney Godson M. Nnaka, representing Zahrey, said the allegations made by the JAE customers "are factually inaccurate and untrue," and that a number of the houses are under construction and about to be finished.
Nnaka said his client does not owe customers $605,362.
"That figure is factually incorrect," he said. "Most of those funds ... were applied toward the construction of those houses."
The order comes at a time of growing concern among some industry leaders that more homebuyers could face problems as new builders and mortgage bankers have rushed into the market to meet a strong demand for homes.
"We've filed some lawsuits. We have ongoing investigations," said Hamer, who has not noticed an increase in cases. "The large portion of builders do a great job, but consumers should be very aware when they enter into these large purchases, which in many cases are the biggest purchases they make in their lives."
