Attorney General Koster continues ‘zero tolerance’ stance on mortgage scams
Koster files suit to stop company from cheating people seeking foreclosure assistance and mortgage modification
Jefferson City, MO – May 26, 2009 – (RealEstateRama) — Attorney General Chris Koster today filed suit against a company that offered foreclosure relief and mortgage modifications to Missourians, but did not provide the services promised.
Koster said the company, Gateway Mortgage Modification, LLC, of St. Louis, charged large sums of money and promised it would negotiate a new, workable solution on the client’s existing mortgage, including a change in the terms of a loan in order to help the borrower stay in the home and avoid foreclosure. However, the Attorney General’s investigation found the company took customers’ money but did not provide the services as promised.
“This is an outrageous exploitation of people who are in financial trouble and may even be facing the loss of their homes,” Koster said. “The Attorney General’s office will continue to investigate fraudulent foreclosure-relief companies like Gateway Mortgage Modification, and we will fight to get restitution for the people they have harmed and stop them from cheating anyone else.”
The Attorney General said Gateway has about 200 current clients and is continuing to solicit more business. Customers are charged $2,159.00 if they have a mortgage up to $100,000 and a fee of $2,999.00 if they have a loan balance between $300,001 and $500,000. The company requires upfront payments before services, which is illegal in Missouri.
Koster said Gateway actually makes customers’ financial problems worse and their homes at risk by seeking to get Gateway’s payment before the client makes a mortgage payment. That puts customers even further behind on their mortgage.
Koster also said Missouri law requires contracts to include a three-day cancellation notice, which Gateway did not include in its contracts with customers. In addition, while the company promises a full refund if the customer is not completely satisfied, in reality some customers who tried to complain did not get their calls returned. While the company also promised customers its legal department would work on their case, in reality, the company does not have any lawyers and its employees do not have any legal background or training.
“I want to reiterate that many of these foreclosure relief companies are nothing more than rip-off artists,” Koster said. “Never pay upfront for this service and always do your research before hiring anyone.”
The Attorney General is seeking restitution for customers and civil penalties.
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