Kansas AG files suit against five mortgage companies, alleges fraud / LJWorld.com

Archive for Tuesday, July 7, 2009

Announcement came in Tuesday new conference

Associated Press

July 7, 2009, 8:28 a.m. Updated July 7, 2009, 10:37 p.m.

Kansas Attorney General Steve Six on Tuesday announces "Operation Homestead." The effort is aimed at cracking down on mortgage fraud and scams directed at people in the foreclosure process. He said his office is also stepping up education efforts in hopes of keeping Kansans from being taken advantage of by unscrupulous companies posing to offer assistance in foreclosures. Six's news conference was held outside his office in Topeka.

Companies scam Kansas homeowners

Steve Six has filed lawsuits against five companies that are taking advantage of homeowners in need of help. Enlarge video

Topeka — Kansas' attorney general is accusing five companies of preying on struggling homeowners and has sued them as part of what he calls a new campaign against mortgage scams.

But an attorney for one of the companies said Tuesday that allegations against it are "sort of bizarre," adding that Attorney General Steve Six "is getting bad information from his underlings" in its case.

The lawsuits allege that the companies engaged in deceptive and "unconscionable" practices. Six accuses three companies of collecting excessive fees from consumers who wanted to modify their mortgages and says the other two defrauded owners who faced losing their homes after foreclosures.

Six announced the lawsuits Tuesday, though his office filed the lawsuits in state district courts last week. He said his office also has updated its Web site to provide more information about potential scams and consumers' rights when they face foreclosure.

Each lawsuit asks a judge to force the company to stop what Six considers deceptive practices and pay restitution. The attorney general also wants the companies fined, asking for at least $75,000 in four of the five cases.

"In several of these cases, the consumers have lost their homes and ended up much worse financially than they were before they received the help of these companies," Six told reporters.

The two companies accused of harming consumers who faced losing their homes were sued in Johnson County, where they have their suburban Kansas City offices. They are Apple Asset, of Overland Park, and Rush Properties Inc., of Olathe.

Six accuses both of persuading struggling homeowners to give up "redemption" rights for a few dollars and lease their homes, with the company selling the property later for a profit.

Kansas law gives some homeowners up to 12 months to buy back their property after a foreclosure and sheriff's sale and allows them to continue living there. The practice dates to 1893.

Officials with Rush Properties did not return telephone messages.

But Ken Jones, Apple Asset's attorney, said it would provide a detailed response to Six's allegations. He suggested Six's office is confusing Apple Asset with the other company and said Apple's leaders "categorically deny each and every allegation."

"I challenge the attorney general to come up with any specific instance," he said. "They cannot because it does not exist."

The three companies accused of collecting excessive fees while actually providing little or no real help to consumers wanting to modify their mortgages were ABS Saveco of Canton, Ga.; Helping Hands Support Services Inc. of Costa Mesa, Calif., and Kirkland Young of Miami.

The lawsuits against them were filed in Shawnee County, home to the state capital.

A message left for Kirkland Young officials was not returned, nor was a message left with ABS' resident agent. Two numbers for Helping Hands were repeatedly busy.

In all three cases, the lawsuits allege, the company solicits business and tells consumers it negotiates with mortgage companies, when it merely files paperwork that consumers can submit on their own. Fees charged can be $2,500 or more, the lawsuits allege.

Discussion

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7 July 2009
at 11:49 a.m.

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Raider (Anonymous) says…

Why not list the five companies so we'll know?
7 July 2009
at 12:40 p.m.

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headdoctor (Anonymous) says…

The companies Apple Asset, LLC, in Overland Park, and Rush Properties, LLC, in Olathe.

Kirkland Young in Florida, ABS Saveco in Georgia, and Helping Hands Support Services in California
7 July 2009
at 3 p.m.

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kansasmutt (Anonymous) says…

I have delt with Wells Fargo and got noplace in my quest to lower my rate and refi. Like talking to a brick wall.The rudest people i ever worked with.They act like your scum becuse you try to do something to better yourself.Example. They sent a notice to refi and help out folks who want to lower the rate and group a second mortgage with the first all in one. You call and they say you make too much or your credit score is too high and say you are SOL. Nice folks.
7 July 2009
at 3:16 p.m.

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Machiavelli_mania (Anonymous) says…

Wow! I see he is finally (!!) doing something while sitting in that office.
7 July 2009
at 3:19 p.m.

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Machiavelli_mania (Anonymous) says…

Carla Stovall was the best AG I have ever known Kansas to have.
7 July 2009
at 3:30 p.m.

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headdoctor (Anonymous) says…

Yup. Heaven forbid that there are people out there trying to be proactive with their finances. Some of those programs if you do qualify will leave your credit score riddled and they aren't telling people that. Of the people that aren't to late to save these refinancing programs are pretty worthless.

The credit card companies are being just a bad. Personally I think they are changing somethings as part of a temper tantrum to get back at Obama for jerking up their chain. I wonder how many people will screw up and be in more trouble now having to calculate their own minimum payment, or dealing with them jacking the interest rate and get stuck with penalties. The card companies have had the freedom since their creation to do as they please for the most part.

Credit Cards are the legal way to scam the middle class. Quote from Rembrant Brown on the TV show “Sliders”.
7 July 2009
at 4:17 p.m.

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Marion (Marion Lynn) says…

And where was the Attorney General when mortage companies were offering 125% variable-rate mortgages to anyone who could sign a name?

Some “consumer protection” service!

Kinda like clsoing the barn door after the horse has gone out, don't you think?

7 July 2009
at 4:37 p.m.

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jackpot (Anonymous) says…

Raider: Why start using the 5 W's now? That would be out of whack.
7 July 2009
at 10:37 p.m.

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merrill (Anonymous) says…

Yep Carla Stovall was definitely active and effective …..