Operation Homestead: AG Six goes after mortgage fraud and scams targeting Kansans

Six sues five companies, extends assistance to Countrywide customers, increases education on foreclosure

July 7, 2009-- Attorney General Steve Six is taking legal action to stop those who are preying on Kansans facing foreclosure or other financial difficulties. Today Six launched Operation Homestead by filing five law suits, extending help to Countrywide customers, and increasing educational resources available to consumers.

The lawsuits are aimed at businesses the attorney general alleges are defrauding Kansans by running redemption rights and loan modification scams. In several of the cases, the consumers lost their homes and ended up much worse financially than they were before. Six said the lawsuits send a strong message that his office will not tolerate mortgage fraud in Kansas.

"During these tough economic times when more Kansans face foreclosure, unscrupulous people are trying to take advantage of homeowners under the guise of offering assistance," Six said. "With these lawsuits, we are working to stop the exploitation of Kansas homeowners already in difficult financial situations."

Two of the defendants operate "Redemption Rights Scam," Six said. The companies buy a homeowner's redemption rights, lease the house back to the homeowner, and then when the homeowner can't afford to buy the house back they sells the house for a profit of more than $20,000. The companies Apple Asset, LLC, in Overland Park, and Rush Properties, LLC, in Olathe.

Three defendants allegedly operate loan modification scams, Six said.  The companies offer to negotiate modifications to the homeowner's mortgage for a sizable fee. However, the extent of the service that the company provides is to mail in documents on behalf of the consumer. The companies are Kirkland Young in Florida, ABS Saveco in Georgia, and Helping Hands Support Services in California.

As part of Operation Homestead, the Attorney General's Office will also be assisting consumers with certain Countrywide mortgages. A letter will be sent to those consumers identified as eligible to participate in the settlement. Once consumers respond to the letter, cash payments will be sent. The payments will be calculated based on the number of consumers who respond.

"I'm pleased to help these consumers directly who were taken advantage of by subprime loans and other deceptive mortgage schemes," Six said.

Also as part of the new effort, Six is adding significant resources to http://www.ksag.org/ to educate consumers about their rights in foreclosure. In the new Mortgage Fraud section of the website, consumers can find information about redemption rights, the foreclosure timeline, prevention tips and more.

"Foreclosure can be a lengthy and difficult process for homeowners. It can be confusing and intimidating to talk with lenders and financial institutions, especially if one does not know their rights and options," Six said. "It is important for Kansans to learn their rights and ask questions before it's too late."

Six said consumers - especially if they are already facing financial difficulties - should be extremely cautious when dealing with individuals or companies they are unfamiliar with in regard to home-financing issues:

For more information about mortgage scams, visit: http://www.ksag.org/content/page/id/552.

For more information about the Countrywide settlement, visit: http://www.ksag.org/content/page/id/460.