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June 7, 2012

Judge Bars Urbandale Man from Foreclosure Consulting

(DES MOINES, Iowa) A Polk County judge barred the Urbandale owner of a closed Arizona company from offering foreclosure consultant services in Iowa and ordered a suspended $40,000 penalty, after Attorney General Tom Miller alleged that the defendant illegally collected money in advance for foreclosure consulting services through his now closed Arizona-based company.

Polk County District Judge Brad McCall last week ordered Bruce Spurlock, 65, co-owner of the now-defunct Discount Mortgage Relief and Mortgage Relief, LLC, of Scottsdale, to refrain from “engaging in any manner as a ‘foreclosure consultant.’”  Miller alleged that Spurlock violated Iowa’s Consumer Fraud Act by demanding, charging and collecting money for foreclosure consulting services before fully performing all services.

Discount Mortgage Relief closed in 2010 after the Arizona Attorney General sought and received a court injunction against the company under Arizona’s Consumer Fraud Act.  The Arizona Attorney General also filed a lawsuit, alleging that homeowners paid the company thousands of dollars for "guaranteed" home-loan modifications they didn’t receive.

Other state attorneys general, including those in Arkansas, Georgia, Maryland, New Hampshire and Washington, have conducted or are conducting civil law enforcement actions against the company and its principals, including Spurlock.

“Unfortunately, we know that there are Iowans who paid thousands of dollars for so-called mortgage rescue services they didn’t get at all,” Miller said.  “What’s also heartbreaking is that these Iowans who were already in deep financial trouble and needed every penny they could save could have gotten help for free through the Iowa Mortgage Help Hotline.”

The consent judgment suspends Spurlock’s $40,000 civil penalty, as long as Spurlock complies with the court order.  Spurlock denies allegations that he violated Iowa’s Consumer Fraud Act.

Warning signs of foreclosure "rescue" scams:

  • Beware of Internet ads promising loan modifications.  Be wary of solicitations that come by phone, mail, or email, or even arrive at your door, because information about people facing foreclosure is included in public court records.
  • Watch out for solicitations from out-of-state law firms.  Most are foreclosure rescue scams in disguise.
  • Beware if someone claims to have a "special relationship" with a lender or "servicer."   They don't!  If a foreclosure or mortgage assistance consultant tells you not to talk to your lender or mortgage servicer directly, that’s a red flag because that's just what you should be doing.
  • Beware if a foreclosure or mortgage assistance consultant asks for advance payment.  It's illegal in Iowa to charge any foreclosure consulting fee until all services under the contract are provided.

Miller urges Iowans facing foreclosure or having trouble making payments to call the Iowa Mortgage Help Hotline at 877-622-4866.  The hotline is sponsored by Miller’s office and the Iowa Finance Authority.  Iowa Mortgage Help offers free, confidential help from trained counselors.

To file a complaint or for more information, call the Attorney General's Consumer Protection Division at 515-281-5926, or outside Des Moines call, toll-free, 1-888-777-4590.  On the Web:

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