The state attorney general's office sued 20 real estate companies and appraisers in the Poconos on Wednesday, alleging they overstated property values and falsely promised low monthly mortgages in a scheme that preyed on first-time home buyers.

The suit, filed in Commonwealth Court in Harrisburg, seeks $1.9 million in restitution from the defendants and a court order banning them from the land/home sales, finance or appraisal business in Pennsylvania. The suit also seeks an additional $800,000 in penalties and investigative costs for a total of $2.7 million.

State Attorney General Jerry Pappert said the suit was based on 41 complaints from people who were promised affordable housing, low down payments and low monthly mortgages over the last several years, starting in 1999.

What they got instead in many cases were overpriced properties based on inflated appraisals that left them ''trapped'' in homes that carried mortgages worth more than the house, Pappert said.

And none of them got what they saw in advertisements that, for example, pictured a ''luxurious'' home that was selling for $170,000 with a 10 percent down payment and a monthly mortgage of $845, Pappert said.

The sales pitch also included promises of ''one-stop shopping'' that would ''take care of everything'' and advice not to bother hiring a private attorney because lawyers would ''delay and complicate the sales process,'' Pappert said.

In all, 22 home buyers said they were discouraged from hiring their own lawyer, Pappert said.

The lawsuit is the fourth — three by the state attorney general and one by a homeowners group — alleging housing fraud in Monroe County, the second-fastest growing county in the state.

The state attorney general also is conducting a criminal investigation before a grand jury in Harrisburg.

The homeowners group filed a $1.5 billion suit in federal court in Scranton against 29 people or institutions earlier this month.

Developers Steve Parisi and Donald Kishbaugh and appraisers Lisa Marie Gibson of Stroudsburg and Jenny Centralla of West Pittston, Luzerne County, are defendants in the $1.5 billion suit and the latest state attorney general suit.

In addition, Monroe County District Attorney E. David Christine Jr. said Wednesday his office is conducting several dozen investigations into alleged fraud by contractors, mortgage brokers and title companies. He said none of the cases involves problems with appraisals.

The 103-page lawsuit filed Wednesday catalogs a litany of homeowners' nightmares, including appraisals showing home values $24,000 to $55,000 less than the sale price, sometimes only months after the home was bought.

Many of the buyers, already at the limits of their monthly resources just paying the mortgage, received misleading information about real estate tax payments, which dramatically increased — sometimes by several hundred percent — after the sale, the suit said.

''This alleged scheme was executed with total disregard for the true market value of the property and with no concern for the buyers' ability to pay,'' Pappert said. ''It appears that these defendants were in the business of selling overpriced properties to questionably qualified buyers.''

Pappert said homeowners were misled to ''maximize the defendants' profits, at any cost, including guaranteeing the financial ruin of dozens of home buyers and their families.''

The ''good faith estimates'' for mortgage payments, closing costs and the construction costs were thousands of dollars higher than what was originally presented to the prospective buyers, Pappert said.

In the latest lawsuit, one home buyer, Natalie Wilson of Saylorsburg, was told her mortgage would be $1,000 a month but wound up with a $2,300 monthly payment, according to the suit filed by the state attorney general.

Wilson was trapped in a financing agreement that was destined for financial disaster, the suit says.

The companies Wilson did business with, P & K Developers and Eagle Valley Homes of Brodheadsville, are among the defendants named in the $2.7 million suit. Steven Parisi of Brodheadsville, who owns Eagle Valley Homes and is president of P & K Developers, has said he will file complaints against the people who filed complaints against him.

Most of the appraisers named in the suit are from Stroudsburg, including Gibson, Stanley L. Cheslock, Lawrence Cachia and Kathy Spitzfaden.

NEPA Appraisal Services, 304 Park Ave., Stroudsburg, also is named, and the suit lists Gibson, Cheslock, Cachia and Spitzfaden as employees.

According to the suit, Wilkins & Associates Real Estate, one of the largest real estate companies in the Poconos, owns NEPA Appraisal and lists its place of business at 9 Fork St., Mount Pocono.

Tom Wilkins, the owner of Wilkins & Associates, said Wednesday he does not own NEPA. ''We sold that eight years ago,'' Wilkins said. ''We don't have anything to do with that.''

Wilkins said he sold the business to Spitzfaden and her partner. ''That's got nothing to do with us,'' he said.

Wilkins said he is in the business of housing resales.

''It's all got to do with new construction,'' Wilkins said, referring to the allegations of housing fraud.

Wilkins said he would not know Parisi ''if I tripped over him at Kmart.''

Seven of the named defendants in the state attorney general's suit are Parisi or his companies.

Also named in the suit are Rose A. Purdue of Kunkletown, doing business as Nations 1st Mortgage Co.; Eagle Valley Homes North Inc., Marshalls Creek; Nations 1st Mortgage Co., Brodheadsville; Mobile Developing Co. of Saylorsburg; Lisa Marie's Appraisal Service of Cresco; and Anthony Novitsky of Milnesville, Luzerne County, doing business as Pocono Northeast Appraisal Co.

Pappert said the defendants are accused of violating Pennsylvania's unfair trade practices and consumer protection laws and the federal Truth in Lending Act.

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