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Missouri Sues Foreclosure "Rescue" Business

February 3, 2006

Mortgage "Rescuers" • Florida Attorney General Warns Big Banks On Modifications • Ohio Sues Mortgage Servicer For 'Incompetence' • Brown Challenges Banks On 'New Wave' Of Foreclosures • California Law Cracks Down On Foreclosure Rescue • Feds And States Get Tough On Scams • FTC Continues Crackdown On Mortgage Relief Scams • Florida Sues Foreclosure "Rescuer" Targeting Hispanics for Fraud • Class Action Proceeds Against Debt-Relief Scam • States Increase Pressure On Foreclosure Consultants • New York Sues Loan Modification Company • California Puts Foreclosure Consultants On Notice • Mortgage Modification Program Off To Slow Start • Florida Sues Four Foreclosure Rescuers • California Sues Dozens Of Mortgage Rescue Scammers • Don't Put Your Hopes, Or Money, In A Loan Modification • Ohio Launches Foreclosure Rescue Crackdown • Feds Look at Tougher Foreclosure 'Rescue' Rules • California Seeks To Register Foreclosure "Consultants" • FTC Slams Fake Government Loan Rescue Operation • Ohio Puts Heat on Foreclosure Rescue Operations • California Foreclosure ‘Rescue’ Defendants Rounded Up • Missouri Joins Mortgage Scam Smackdown • Florida Targets Fraudulent Foreclosure "Rescue" • Florida Foreclosure "Rescue" Company Shut Down • Illinois Sues Seven Companies for Mortgage Rescue Fraud • California Busts Foreclosure Scam Ring • Florida Sues Foreclosure Rescue Company for Deceptive Practices • Mortgage Rescue Fraud Schemes On The Rise • Indiana Charges Mortgage Broker With Scamming Homeowners • Indiana Targets "Foreclosure Consultant" • Missouri Attorney General Takes on Foreclosure Scams • New Washington Law Protects Distressed Home Sellers • Foreclosure 'Rescue' Firm To Pay $1.2 Million To Arizona Victims • Florida Governor Signs Foreclosure Rescue Law • California Busts 'Land Grant' Foreclosure Scam Artists • California Shuts Down Mortgage Scam Artists • FTC Takes On Mortgage 'Rescue' Operations • Illinois Uses New Law to Sue Mortgage Rescue Company • Washington State Settles with Mortgage "Rescuers" • Scams and Foreclosures On the Rise • Illinois Sues Mortgage "Rescue" Companies • Mortgage Crisis? Act Now to Avoid Foreclosure • North Carolina Shuts Down Mortgage "Rescue" Operation • Illinois Shuts Down Mortgage "Rescue" Scam • Indiana Fines Mortgage "Rescue" Firm • Illinois Sues Another Mortgage Foreclosure "Rescuer" • Missouri Sues Foreclosure "Rescue" Business • Illinois Launches Offensive Against Foreclosure "Rescuers" • New York Takes On Predatory Real Estate Scams • Texas Halts Bogus Foreclosure Rescue Operation

Missouri Attorney General Jay Nixon is asking for a court order to shut down a foreclosure consultant business in St. Joseph, Mo.

Nixon says Doug and Stephanie Heck, the owners of HomeSmartz Mortage, charged excessive fees, devised contracts that violated Missouri law and ultimately sought to strip one consumer of the very home they promised to protect.

In his lawsuit, Nixon says the Hecks engaged in deceptive and unfair trade practices.

The lawsuit alleges 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 says 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.

"The defendants in this case shamelessly preyed upon a homeowner who was in danger of losing his house, exploiting that fear to charge excessive interest rates and ultimately to try to take the victim's home away from him," Nixon said. "Individuals who act in such a predatory manner should not be in business where they can harm Missouri consumers."

Nixon is asking the court to issue a permanent injunction that prohibits the defendants from advertising, offering for sale or selling foreclosure consultant services.

The Attorney General also is asking that the court order the defendants to provide full restitution to all consumers from whom the defendants received payment who have been aggrieved by any of their unlawful or deceptive practices; to require that the defendants pay a civil penalty to the state of $1,000 per violation, plus 10 percent of the total restitution ordered against the defendants; and to require the defendants to pay all court, investigative and prosecution costs in the case.

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