Attorney General Chris Koster has filed suit against two home mortgage companies — Goldstar Home Mortgage and Oxford Lending Group.
Koster says his office is taking a zero-tolerance stance against mortgage deception. These two lawsuits follow a similar lawsuit filed by Koster last week against a California-based mortgage broker doing business in Missouri.
He made stops Monday in St. Louis, Columbia and Kansas City to raise awareness about his intent to shut such companies down.
He says he’s urging all Missourians to do two things: first, be very skeptical of special offers they get from mortgage brokers, and second, to send any fishy offers to his office for further investigation.
Koster says his office is getting new complaints daily … as are attorneys general offices across the country.
Koster says he will "aggressively investigate any suspicion of mortgage deception and use all means in the legal system to prosecute and shut them down or end their deceptive practices."
The Attorney General charges Goldstar Home Mortgage with sending "direct-mail letters to consumers with the consumers’ own bank name at the top of the letter, making it appear that the consumers’ bank was encouraging them to refinance."
In addition, "Goldstar marketed mortgage-refinancing products that were inappropriate for the homeowners they targeted. In at least one case, the business offered a loan that likely would have left a homeowner with a mortgage that was higher than the home was worth," he says.
The Oxford Lending Group "made deceptive representations regarding the ‘Economic Stimulus Act of 2008’ in its mailing to appear that consumers had a special opportunity to refinance, and using the HUD (U.S. Department of Housing and Urban Development) label and name to mislead the recipient that the letter was related to the federal government," Koster’s office reports.
"Consumers are particularly vulnerable to mortgage scams now, as foreclosures continue to increase, interest rates are at historic lows for refinancing, and the federal government is launching its plan to help struggling homeowners," Koster says. "While the federal government’s program puts measures in place that can help homeowners, unscrupulous businesses are luring consumers into scams that can actually leave them in worse financial condition."
Koster warns that Missouri seniors are particularly at risk to such scams.
"Increasingly, mortgage brokers are using deceptive ploys to draw Missourians back into the refinancing game," he says. "Our goal is to alert consumers that these scams are out there and to sue every mortgage broker who crosses the line."
Consumers should check with their bank or call the Attorney General’s consumer hotline at (800) 392-8222 or visit the Missouri Attorney General’s Web site if they are unsure about an offer’s validity.
"Pack them up and send them to our office in Jefferson City," Koster says. "We will look at what you send us, investigate each new deceptive tactic and prosecute to the fullest extent of the law,"
For more about the federal government’s help for homeowners, as well as mortgage scams, visit www.makinghomesaffordable.gov.