ELLSWORTH – The state’s Attorney General says a local real estate company’s homeownership plan misled customers, who filed complaints.
Attorney General Aaron Frey announced a settlement agreement with Linnehan Homes earlier this week.
“It was regarding a product they called the ‘American Dream Path to Home Ownership Plan,'” said Marc Malon, spokesman for the Attorney General’s office. “Linnehan Homes made statements that were misleading to consumers in the marketing of this plan.”
“Some consumers in the plan believed they were simply buying a home but what they were doing in actuality is renting with an option to purchase,” Malon said later. “So it ended up being, for many consumers, not what they thought they had signed up for.”
John Linnehan said his company did nothing wrong.
“We have never violated any Maine law,” Linnehan said Thursday.
“We sold approximately 80 homes and we have about 50 percent of the people didn’t make it,” he said, adding later that customers “either terminated or did not pay their bills and were asked to move out and terminate their plan.”
Those who “didn’t make it” lost all the money they used for a down payment and any payments they made towards the cost of the home they planned to purchase.
“Those are all people who, most are all people who could not get a mortgage conventionally at any lender or any bank anywhere,” Linnehan said.
Linnehan has agreed to change the wording in the plan and to reimburse some customers. The company also agreed to reimburse customers half of their down payment, if they leave the plan within two years, based on a request by Frey’s office.
“Everybody has an opportunity to make it and ultimately 50 percent of the people were successful so I’m very happy with that,” Linnehan said.
The website for Linnehan Homes states they are currently not offering the American Dream Path program, but will to reinstate the plan in the spring.