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Koster files lawsuits against mortgage scams

Tuesday, April 21, 2009 | 12:01 a.m. CDT

ST. LOUIS — Attorney General Chris Koster filed lawsuits Monday accusing two businesses of sending consumers misleading direct-mail ads for mortgage refinancing.

He said more suits against other scams could follow.

Koster, in stops in St. Louis, Columbia and Kansas City, declared zero tolerance for scams by mortgage lenders or brokers.

He said Americans are especially vulnerable now because of the economic crisis and high foreclosure rate.

Koster urged consumers to be skeptical of any mail related to mortgage refinancing, foreclosure relief or loan consolidation. He recommended they check with their bank or the attorney general's consumer protection division. He also said he wants consumers to send him the offers they receive in the mail.

“Pack them up and send them to our office in Jefferson City,” Koster said during a news conference at the MU School of Law. “We will look at what you send us, investigate each new deceptive tactic and prosecute to the fullest extent of the law. That is what zero tolerance for mortgage scams means in Missouri.”

Koster sued Gold Star Home Mortgage in Missouri and Oxford Lending Group in Columbus, Ohio. Each was prompted by consumer complaints to his office.

An Oxford Lending spokesman said the company would not comment. A message left at Gold Star's office in St. Joseph was not returned and the office in Columbia had no comment.

Koster said Gold Star's solicitations listed the recipient's bank on the letterhead, leading consumers to believe their own financial institution was encouraging them to refinance.

In one case, a Gold Star loan offer would have left the homeowner paying a mortgage higher than the home value, he said.

The Oxford Lending Group's mailings misled recipients into thinking they were related to the federal government, Koster said.

Koster said he filed a lawsuit last week in a California mortgage rescue scam in which consumers were told to pay $2,000 up front but received little or no services.

Several other possible scams are under investigation, he said.

"You'd think in this economic situation, given what has happened, that this type of action would no longer be engaged in," Koster said in a telephone interview. "It is continuing. They're taking advantage of older people even in this time of desperation."

He said many people don't recognize such deceptions as scams and that the financially distressed and senior citizens are especially vulnerable.

He said consumers should check with their bank or call the Attorney General’s consumer hot line.

Concerned consumers can call the Attorney General's hot line number at 800-392-8222 or go to www.ago.mo.gov. They can also learn more about the federal government's help for homeowners, as well as mortgage scams, at www.makinghomesaffordable.gov.

Missourian reporter Dalena Hardy contributed to this report.


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Comments

Joe City April 21, 2009 | 1:24 p.m.

Granted, It's gallant what he's doing, but it's too bad that some in society can't see a scam for what it is.
I know that some of them are getting more and more sneaky, but at the same time.............

If it's too good to be true, than it probably is.
(Too good to be legal anyway)

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