Mo. attorney general warns of mortgage finance scams

Tuesday, April 21, 2009

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.

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

Misleading mailings

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 upfront but received few 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.

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