Finding financing for a home is difficult in the best of times, but would-be homeowners need to be alert to potential financing scams.
BBB Investigator Bill Smith looked into a St. Louis restaurant worker's attempt to buy a house in St. Ann that was thwarted when a dishonest financing company took money from him and failed to provide financing. The BBB's investigation is summarized in today's release:
St. Louis, Mo., June 11, 2012 – The Better Business Bureau (BBB) is warning consumers to be cautious when asking for loan help from Blue Financial Group, based in Maplewood, Mo., or its owner, Cleon Williamson.
Williamson, of Spanish Lake, describes himself as a broker for private financing of home purchases or other projects. In 2008, a St. Louis County judge ordered
Williamson to pay $147,000 for his role in a complex home-buying scheme to
defraud a California title insurance company.
Last month, a St. Louis restaurant worker said he paid Williamson $1,345 on the
promise that Williamson would help him get financing for a house the worker
hoped to purchase. The worker said he never got the loan, and his payment has
never been returned, despite repeated requests for a refund.
“This is not right,” the restaurant worker told the BBB.
Michelle Corey, BBB president and CEO, said Williamson’s troubled past in the home mortgage business is good reason to be wary of doing business with either
Williamson or Blue Financial Group. “Trust is a critical part of any business relationship,” Corey said. “When a business gets involved in activities that erode that trust, consumers have a right to be suspicious.”
The most recent case involves an employee of a Central West End restaurant who said he visited the local office of a national lending company in mid-December,
hoping to get a loan to buy a house in St. Ann.
He said a loan consultant there turned down his request for financing, but came into the restaurant two days later with Williamson. The worker said the loan consultant told him that Williamson and Blue Financial Group could help him find financing.
The worker said he entered into an agreement with Williamson, based primarily on the mortgage consultant’s recommendation. After Blue Financial Group failed to locate financing, the worker lost the house and asked for a return of his $1,345 advance payment. The money has not been returned, despite numerous phone calls and three visits to Williamson’s Maplewood office.
The mortgage consultant said he was trying to help the worker out by suggesting
Williamson and Blue Financial Group. He acknowledged that he did no research on
Williamson or Blue Financial group. “The guy seemed legit,” he said of Williamson. “It seemed like he had his act together.”
Williamson said that he no longer has the restaurant worker’s money. He said he paid it to the business that was supposed to make the loan, but he does not remember the name of that business. Williamson offered to supply proof to the BBB that he transferred the money to the lender, but has not done so. Williamson said he somehow had “lost track” of the restaurant worker and would work to get his money back.
Four years ago, in March 2008, a St. Louis County judge ordered Williamson to pay $97,000 in damages to First American Title Insurance Co. after First American
sued Williamson and his company, American One Finance, for their role in a mortgage fraud scheme involving a property in the Jennings, Mo., area. In the court ruling, the judge assessed $50,000 in punitive damages, saying that First American “has also demonstrated that Cleon Williamson committed fraud.” Court
records show that the damages have not been paid.
The BBB offers the following advice for consumers who deal with mortgage brokers or lenders:
- Beware of dealing with businesses or individuals you do not know. Research businesses thoroughly before entering into any agreement. Ask for references and contact them. If possible, visit the business’s office.
- If you are asked to pay an advance fee before getting a loan, make sure you
understand exactly why the fee is being charged. Remember that it is illegal for a company offering a loan by phone to charge any up-front fees.
- If you do make a payment in advance of receiving a loan, find out whether the payment will be refunded if the loan does not go through.
- Read any agreement carefully and make sure you understand it before signing off on it.
- Be wary of lenders who are not interested in your credit history, who do not
disclose their fees clearly and prominently or who are not registered in your
- Check out BBB Business Reviews at www.bbb.org or by calling 314-645-3300.
About the BBB
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