Attorney General's News Release
July 15, 2009
Attorney General Koster joins FTC, California in suit against foreclosure consultant
--obtains restraining orders against two fraudulent businesses--
Jefferson City, MO. -- Attorney General Chris Koster today announced he has obtained restraining orders against two foreclosure consultants he had previously filed suit against, forcing them to stop violating Missouri law.
Koster joined the Federal Trade Commission and the state of California to obtain a temporary restraining order against US Foreclosure Relief. A temporary receiver was also appointed to run the California-based business. Koster originally filed suit against the California company on April 7. Koster also obtained a preliminary injunction against Gateway Mortgage Modification, LLC, of St. Louis.
Koster said both businesses charged consumers large sums of money up-front, with the promise they would help consumers avoid foreclosure or help them change the terms of their mortgage. In reality, the businesses provided little or no service to the consumer. The businesses also broke Missouri law by requiring up-front fees before they provided services.
"In Missouri we have zero tolerance for people who prey on those in serious risk of losing their homes," Koster said. "We will continue to aggressively pursue businesses that engage in mortgage-relief scams to stop them from operating in Missouri."
The announcement coincides with Koster's testimony July 14 before the United States Senate. Koster told Senators his office has seen sharp increases in consumer complaints related to both mortgage-rescue and debt-settlement businesses. In 2007 and 2008 combined, the Attorney General's office received a total of 25 complaints about mortgage-rescue companies. In just the first half of the year in 2009, his office has already had 84 complaints.
Koster has declared a "zero tolerance" campaign against mortgage fraud in Missouri. Since April 6 he has filed suit against five companies offering mortgage refinancing or foreclosure relief, with more than a dozen additional official investigations currently underway.
Koster's announcement today is part of a nationwide "sweep" being called "Operation Loan Lies" by the states and the Federal Trade Commission, the U.S. Department of Justice, local district attorneys and the State Bar of California.
The Attorney General urges consumers who have been the victims of fraudulent mortgage-refinancing or foreclosure-relief companies, or who are concerned about the practices of their lender, to contact his consumer hotline at 800-392-8222 or to go online at www.ago.mo.gov.