June 1, 2006
St. Joseph, Mo. — Attorney General Jay Nixon has obtained a consent judgment and permanent injunction against a St. Joseph couple who Nixon sued earlier this year for fraudulent practices in running their foreclosure consultant service. Doug and Stephanie Heck, the owners of HomeSmartz Mortgage, charged excessive fees, devised contracts that violated Missouri law and ultimately sought to strip one consumer of the very home they promised to protect.
The judgment, filed today in Buchanan County Circuit Court, prohibits the defendants from advertising, offering for sale or selling foreclosure consultant services until March 31, 2009. The defendants are also ordered to pay a civil penalty of $6,000 to the state and will be held liable for a period of 90 days after the entry of judgment in this case for restitution on any new complaints alleging any of the fraudulent activities the defendants were charged with.
In his lawsuit filed Feb. 2, Nixon said the Hecks engaged in deceptive and unfair trade practices. The lawsuit alleged the defendants offered their services to a St. Joseph resident who was in danger of losing his home to foreclosure. The defendants approved him for a $20,000 loan, and then had him sign a general warranty deed on the house. The Hecks claimed the deed was a second mortgage that was needed to secure the original loan, but instead it was designed to turn the man's home over to the defendants.
The lawsuit also said the defendants charged the consumer excessive interest rates on the loan, demanding payments of $25,000, and later $30,000, under the threat of foreclosure. The payments were well above the maximum 10 percent rate that foreclosure consultants can claim, demand, charge, collect, or receive as compensation for their services by Missouri law.