For immediate release - Wednesday, August 20, 2003.
Contact Bob Brammer - 515-281-6699.
State Alleges Consumer Fraud
by Wolford Group
Attorney General files lawsuit alleging consumer fraud in the Des Moines company's sales,
purchases, and leases of people's homes.
DES MOINES. Attorney General Tom Miller filed a lawsuit today alleging that the Wolford Group, Inc., engaged in
deception, fraud and misrepresentation in their advertisements, representations and sales practices directed to consumers
who wished to sell their homes, or to buy homes.
The lawsuit was filed Wednesday afternoon in Polk County District Court in Des Moines. Defendants named in the suit are
The Wolford Group, Inc., and the Wolford Corporation, of 4214 Fleur Drive in Des Moines, Rodney Wolford, Sr., and Rod
The suit alleged that the defendants advertise and represent to home sellers that they buy homes for cash within a few days
of agreeing to purchase a home, when in fact they keep home sellers "on the hook" sometimes for years, often providing
little cash to the seller and failing to honor promises to make mortgage payments and tax payments and maintain the
The suit alleged that, instead of purchasing a seller's home quickly in cash, the defendants enter other agreements with
sellers, such as a "real estate option agreement" that may depend on a subsequent buyer closing on a purchase of the house -
even though in many instances "the buyer is foreseeably unable to obtain refinancing," according to the suit.
The suit alleges that home sellers also have been harmed when the Wolford Group failed to honor promises that it would
make consumers' mortgage payments on a timely basis, maintain property insurance, pay all property taxes before they are
due, and maintain the condition of the properties.
In some cases, the suit alleged, Wolford did receive proceeds from some buyers who did manage to obtain refinancing - but
failed to pay mortgages outstanding in the seller's names.
The suit also alleged numerous misrepresentations to consumers wishing to buy homes:
- Representing that consumers would eventually qualify for a mortgage
loan on a property after they made payments on a real estate installment
sales contract with the Wolford Group, when in fact the defendants knew
or should have known that many such consumers would not qualify for
a mortgage loan on the property.
- Representing that the defendants would repair credit ratings of consumers
with "bad credit" or "damaged credit" when in fact the defendants failed
to help consumers to whom such representations were made.
- Representing that payments by consumers who entered into real estate
installment sales contracts would reduce a principal sum owing, when
in fact the defendants knew or should have known that the payments went
to reduce interest only.
- Representing that defendants would complete home repairs, but failing
to do so.
Miller said the suit asked the Court to impose numerous injunctive restrictions on Wolford representations and practices, to
restore money to consumers entitled to reimbursement, and to impose civil penalties up to $40,000 per violation of the Iowa
Consumer Fraud Act.
Miller said the petition also asked the court to appoint a receiver in order to protect the interests "of the lawful owners to
such rents, profits, mortgage payments, real estate tax payments, repair payments, and other monies."
The Attorney General's Office also asked the Court to freeze the assets of the defendants. District Court Judge Glenn Pille
ordered the asset freeze early this afternoon. Judge Pille also set a hearing for September 5 for issues of a temporary
injunction, the asset freeze and appointment of a receiver.
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