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Kansas AG Sues Mortgage Companies, Offers Payouts to Countrywide Borrowers

""Kansas Attorney General Steve Six"":http://www.ksag.org/ is taking legal action to stop mortgage rescue companies that he says are preying on homeowners in his state facing foreclosure. This week, Six launched an initiative called Operation Homestead with the filing of five lawsuits.
The attorney general said as part of the effort, he is also extending specific assistance to Countrywide customers who are having trouble making their payments. Six’s office will facilitate ""foreclosure relief payments"" to these borrowers from funds the state received as part of a predatory lending settlement with Countrywide and its parent company Bank of America.
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 in worse financial condition that before they sought assistance. Six said the lawsuits send a strong message that his office will not tolerate mortgage fraud in Kansas.
Six said, ""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. With these lawsuits, we are working to stop the exploitation of Kansas homeowners already in difficult financial situations.""
Six explained that the two Kansas-based defendants - Apple Asset, LLC, in Overland Park, and Rush Properties, LLC, in Olathe - operate redemption rights scam. According to the attorney general’s office, these 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, the companies sell the house for a profit of more than $20,000.
The other three defendants allegedly operate loan modification scams. Six said the companies - Kirkland Young in Florida, ABS Saveco in Georgia, and Helping Hands Support Services in California - offer to negotiate modifications on behalf of homeowners for a sizable fee. However, he says the extent of their services involve simply mailing in the customers documents.
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 homeowners in Kansas identified as eligible to participate in a ""settlement reached"":http://www.ksag.org/content/page/id/460 late last year between the lender and Six, as well as attorney generals in multiple states, in which Countrywide agreed to modify subprime loans for as many as 397,000 homeowners across the country, including more than 1,000 in Kansas. Once consumers respond to the letter, the state will send cash foreclosure relief payments from funds Countrywide agreed to pay as part of the settlement. Individual payments will be calculated based on the number of consumers that respond.
Six said, ""I'm pleased to help these consumers directly who were taken advantage of by subprime loans and other deceptive mortgage schemes.""
Also as part of the new effort, Six is adding resources to the attorney general’s ""Web site"":http://www.ksag.org/content/page/id/552 where consumers can find information about mortgage scams, redemption rights, the foreclosure timeline, and prevention tips.
""Foreclosure can be a lengthy and difficult process for homeowners,"" Six said. ""It can be confusing and intimidating to talk with lenders and financial institutions, especially if one does not know their rights and options. It is important for Kansans to learn their rights and ask questions before it's too late.""

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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