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Consumer News Release

For immediate release - Friday, September 5, 2003.
Contact Bob Brammer - 515-281-6699.

Court Appoints Receiver to Control Wolford Group Assets and Affairs

DES MOINES. Polk County District Court Judge Glenn Pille today appointed Holmes Foster to serve as Receiver and control the assets and manage business affairs of the Wolford Group, Inc. Foster is the former Iowa Superintendent of Banking and CEO of Banks of Iowa.

The Wolford Group, Inc., the Wolford Corporation, Rodney Wolford, Sr., and Rod Wolford, Jr. are defendants in a consumer fraud lawsuit filed by the Attorney General's Office alleging that the defendants engaged in deception, fraud and misrepresentation in their advertisements, representations and sales practices directed to consumers who wished to sell their homes or buy homes.

When the State's lawsuit was filed August 20, Judge Pille issued a temporary injunction and froze Wolford Group assets. When the suit was filed, Attorney General Tom Miller's Office 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."

Judge Pille's order today gives the Receiver, Foster, authority to control and manage Wolford assets, and to protect assets in the interests of home sellers and buyers and other creditors and investors. Miller's office said it will work with Foster to inventory properties, unravel numerous complicated transactions, clear title to properties, and take other measures to help home sellers and buyers and investors obtain the fairest and best possible resolution to the situation. The Receiver works with approval of the Court. The consumer fraud lawsuit remains pending.

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Background:

The State's suit alleged that the defendants advertised and represented to home sellers that they bought homes for cash within a few days of agreeing to purchase a home, when in fact they kept 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 property.

The suit alleged that, instead of purchasing a seller's home quickly in cash, the defendants entered other agreements with sellers, such as a "real estate option agreement" that might depend on a subsequent buyer closing on a purchase of the house - even though in many instances the buyer was "foreseeably unable to obtain refinancing," according to the suit.

The suit alleged 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 were 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.

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.

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