Missouri Attorney General Chris Koster is suing two businesses he alleges are violating state consumer-protection law by sending people misleading direct-mail advertisements for mortgage refinancing. His office filed suit against Oxford Lending Group, based in Ohio, and Gold Star Home Mortgage, based in Columbia, Mo. Koster's office contends Gold Star sent consumers ads making it appear their banks are encouraging them to refinance their mortgages. Oxford is accused of sending out special refinancing offers made to appear they are from the government.
The big concern among investigators right now is with deceptive business practices by companies offering refinance services. A few years ago, when the housing market was still booming, the big problem was mortage fraud. A case in federal court appears to be a good example. Federal prosecutors allege that the owners of a company that bought and sold property for investment purposes, sold 12 homes in the St. Louis area to a local woman. The loan amount was $2.7 million dollars, however the buyer's annual salary was only $50,000 and that the property company owners put up the money for the down payments. A mortgage broker is accused of participating in the scheme by obtaining mortgage financing for all twelve properties and pocketed $226,000 above the normal commission fees. After closing, 11 out of the 12 properties ended up in foreclosure and were resold for $1.2 million for a loss of approximately $1.5 million.
News 4 Investigates is looking into several egregious cases of mortgage fraud. We'll be telling those stories in the weeks to come.