Missouri AG Obtains Money Judgments Against Two Loan Modification Outfits In Separate Cases; Firms Allegedly Failed To Provide Promised Services

From the Office of the Missouri Attorney General:

• Attorney General Chris Koster said [] his office has obtained judgments against two foreclosure rescue companies who allegedly took money from distraught homeowners and failed to provide promised services.

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• Koster said his office reached a settlement with Gateway Mortgage Modification, owned by Richard R. Reichert, Jr. Gateway was alleged to have unlawfully charged up-front fees for foreclosure and mortgage modification services and to have falsely promised consumers that attorneys would negotiate loan modifications on their homes. Koster said the court ordered Gateway and Reichert to pay $65,000 restitution.(1)

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• Koster said First Universal Lending, LLC, based in Palm Beach Gardens, Florida, marketed its services to homeowners who were having difficulty paying their mortgages or facing foreclosure, promising them lower house payments or lower interest rates. Company representatives told some clients to stop making mortgage payments while the modification process was proceeding, which harms consumers by injuring their credit rating and increasing likelihood of foreclosure. The business also illegally required homeowners to pay up-front fees before they would provide any services. Koster said the court ordered First Universal to pay more than $51,000 restitution and $23,000 civil penalties.(2)

For the Missouri AG press release, see Attorney General Koster obtains judgments against two foreclosure rescue companies (Court orders $116,000 in restitution).

(1) In addition, the court permanently prohibited the company from charging up-front fees for services and from falsely representing to consumers that attorneys would negotiate modifications, the press release states. The court also permanently prohibited Gateway and Reichert from violating the state's merchandising practices and foreclosure consultant laws and ordered them to pay attorney fees and costs. Koster said that if the company fails to pay restitution as ordered, an additional $10,000 penalty will be imposed.

(2) The company also is prohibited from charging up-front fees; advising homeowners to stop making mortgage payments; and promising loan modifications they fail to follow through with, according to the press release.