Foreclosure Fraud Alert

STATE OF ARIZONA ANNE TITUS HILBY

DEPARTMENT OF LAW PRESS SECRETARY

1275 W. WASHINGTON STREET PHONE: (602) 542-8019

PHOENIX, ARIZONA 85007-2926 CELL PHONE: (602) 725-2200

WWW.AZAG.GOV ANNE.HILBY@AZAG.GOV

FOR IMMEDIATE RELEASE

Terry Goddard Announces Foreclosure Rescue Fraud Settlement

 (Phoenix, Ariz. – Sept. 23, 2008) Attorney General Terry Goddard today announced a settlement with Harvest Properties Inc. of Tucson, resolving a consumer fraud lawsuit that alleged foreclosure rescue fraud and mortgage fraud by the company and its owners. The settlement was filed on Friday, September 19.

The settlement, which comes in the form of a consent judgment and does not constitute an admission of wrongdoing, requires Harvest and its owners and managers to pay $350,000 in restitution to approximately 100 consumers.

"Consumers have the right to expect that they are being told the truth and are receiving a fair deal," Goddard said. "Especially in these difficult economic times, I will aggressively pursue anyone found to be deceiving Arizonans who are in or facing foreclosure."

Friday’s settlement with Harvest Properties, Inc., along with its owners and managers, Colin Sterling Reilly, Robert Harrington Reilly and Jill Lynae Reilly, resolves allegations that Harvest engaged in a foreclosure and credit rescue scheme that employed deceptive practices to buy foreclosed homes at discounted prices.

Harvest, doing business as HomeVestors and Harrington Sterling Holdings, LLC, is an Arizona franchisee of HomeVestors, a national company that purchases "distressed" homes below market value. HomeVestors is widely known by its billboards reading "We Buy Ugly Homes.com" and "Ug Buys Ugly Homes."

According to court documents, between November 2003 and June 2006, Harvest frequently negotiated "short sales," in which the company worked directly with lenders to obtain a discounted payoff of consumers’ loans in order to buy the property. Court documents also state that Harvest frequently purchased homes "subject to" the loans, meaning consumers’ loans were not paid off as part of the transfer of the properties. Instead, Harvest would separately agree with consumers to make the loan payments under the consumers’ name and credit, which led many consumers to believe that Harvest Properties had assumed the loan from the lender.

Goddard alleged that, in the process of these transactions, Harvest deceived or concealed significant facts from consumers and lenders and engaged in the following:

<< Previous    [1]  2  3    Next >>