Attorney General Salazar Announces $1.1 Million Judgment Against Realtor Engaged in Mortgage Foreclosure Cure Scheme

Denver – Attorney General Ken Salazar announced today that his office has obtained a judgment against a Denver area real estate agent, Ryan Searle, and his family-owned corporations for alleged deceptive business practices in connection with their mortgage foreclosure assistance “Cure Program.” The judgment is pursuant to a settlement reached between Salazar's office and Mr. Searle in connection with a consumer protection lawsuit filed against Searle in December 2001.

“This Court-ordered judgment puts an end to the defendants’ unlawful efforts to take the homes of financially distressed consumers,” Attorney General Salazar said. “Contrary to his claims to help consumers, Searle targeted vulnerable consumers who faced the loss of their homes and disruptions to their families and households. This case signals that all real estate professionals and lenders transacting business in Colorado must treat consumers honestly and must comply with the law or suffer the consequences.”

The terms of a Stipulated Final Judgment entered Wednesday by Denver District Judge Joseph E. Meyer III permanently enjoin the defendants from any future deceptive real estate and lending practices in Colorado. They will also make restitution of over $1.1 million to approximately 80 homeowners who entered into transactions with the defendants. For example, homeowners with second mortgage loans to the Searle entities will have their debt canceled. Homeowners whose second mortgage loans were paid to defendants when the homeowner sold or refinanced will receive monetary refunds. Other homeowners, whose homes were taken and re-sold by defendants, will receive monetary restitution based on the amount of their lost equity. Finally, under the terms of this final judgment, the State will receive reimbursement of its costs.

In addition to Ryan Searle, the other defendants agreeing to the Stipulated Final Judgment are Searle’s wife, Stephanie Searle, his brother, Jeremy Searle, his brother-in-law, Bret Pearce, and numerous family corporations: Financial Relief, Inc., TTT Investments, Inc., Stephanie A. Searle, Inc., Ryan Searle, Inc., dba Mortgage Cure, Inc., Foreclosure Cure, Ltd., Foreclosure Solutions, Inc., and RS&S, Inc., dba Searle Homes, Inc.

In December 2001 Attorney General Salazar filed a lawsuit against Searle and eleven other defendants alleging that, through their unlawful foreclosure cure program, defendants acquired title to over a hundred homes from homeowners facing foreclosure under the guise of assisting homeowners to save their homes from foreclosure. The estimated market value of these people’s property in the Denver metro area exceeded $15 million. The lawsuit alleged that the homeowners were misled into signing over title to their homes in exchange for defendants advancing money for back-payments to bring their mortgage payments current. The homeowners then leased their homes back from defendants with an option to repurchase their houses at an inflated price. Consumers believed these complicated transactions were second mortgage loans and not the sale of their homes.

The state alleged that defendants targeted consumers through door-to-door solicitations and direct mail flyers advertising their Cure Program as “absolutely free” and with “no cost to you.” Defendants made in-home sales presentations to homeowners through high-pressure sales tactics aimed at convincing the homeowners that defendants’ Cure Program would allow families to stay in their homes, rebuild their credit, and keep their monthly payments low.

Defendants’ program required homeowners to transfer title to their homes by quit claim and warranty deeds to the defendants and enter into lease option agreements obligating the homeowners to monthly rental payments sometimes hundreds of dollars more than their original mortgage payment. Any missed rent subjected the homeowners to eviction and loss of equity. Defendants’ promises of credit repair were unfulfilled and homeowners were unable to refinance their homes, as they no longer had title to their properties.

The lawsuit alleged that the defendants engaged in numerous deceptive business practices by making unlawful consumer loans and by providing unlawful credit repair services in violation of the Colorado Consumer Protection Act, the Uniform Consumer Credit Code, and the Colorado Credit Repair laws.

The Attorney General’s office initiated an investigation in 2001 after receiving consumer complaints and information from the Colorado Real Estate Commission concerning defendants’ Cure Program activities. The State’s lawsuit was filed after unsuccessful efforts to have defendants rescind their transactions.

The Real Estate Commission also independently investigated Searle for possible violations of the Colorado real estate laws and subsequently charged Searle with engaging in unlawful practices as a licensed real estate agent. Following a hearing in April 2003, also prosecuted by the Attorney General’s office, State Administrative Law Judge Nancy Connick ruled that Ryan Searle had engaged in numerous violations of the Real Estate Commission rules and recommended that Mr. Searle’s license be revoked. Final action in that matter is pending before the Real Estate Commission.

Of the 120 homeowners who participated in the Cure Program, approximately 30 have already settled claims against the defendants through private counsel.

Consumers who have questions about the settlement can contact the Attorney General’s office at (303) 222-4444.