Eagle Rock Resort near Hazleton has been selling lots at far more than their resale value, Pennsylvania Attorney General Michelle Henry said Thursday when filing a lawsuit to halt sales and obtain compensation for buyers.
The lawsuit alleged that Eagle Rock uses high-pressure and deceptive sales practices and tells buyers that it is offering undeveloped lots at far below market prices. Actually undeveloped lots sell for $30,000 to $100,000, but go on the resale market for $5,000 to $20,000, the suit said.
After selling the lots on its 5,000 acres in Hazle and East Union townships, Eagle Rock continues to benefit because it finances the mortgages and earns millions of dollars from “devasted” consumers.
United Equitable Mortgage Corp. of Texas, which the lawsuit said extends mortgages for properties in Eagle Rock and receives material support from Eagle Rock Resort Co. LLC, which markets its services, is listed as a defendant. Other defendants are Eagle Rock Real Estate Co. and Double Diamond – Delaware Inc.
“We have been trying to sell this lot for about eight years now,” one consumer explained in the lawsuit. “Unfortunately, the value just keeps declining while the fees just keep adding up, from property taxes, community association fees, and school taxes. . . . We are so upset, frustrated and depressed that Eagle Rock deceived us and continues to sell lots without regard to how it will affect the value of lots already sold.”
In sales presentations, Eagle Rock tells prospective buyers that it will drop a $15,000 membership from the sales price, but the lawsuit said, “Upon information and belief, Eagle Rock has never charged, and no consumer has ever paid, the fake initial offer price.”
While brought by the state attorney general, the five-lawsuit is in U.S. District Court for the Middle District of Pennsylvania and alleges violations of federal consumer financial law as well as state law.
The lawsuit asks the court to stop Eagle Rock from committing future violations and seeks other relief, including making Eagle Rock pay restitution; pay civil penalties of $1,000 for each violation or $3,000 if the victims were 60 or older and pay for the cost of investigating and bringing the action.
Henry’s office asked consumers who believe they may have been a victim of Eagle Rock or its co-subsidiaries to file a complaint with the Bureau of Consumer Protection online, by phone 1-800-441-2555, or by emailing scams@attorneygeneral.gov.
