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Land Contract Operation a Scam

Rod Wolford Sr. found guilty

March 2, 2006


A formerly high-flying land-contract brokerage has crumbled amidst criminal charges, burned investors and stunned borrowers.

At one time, Rod Wolford Sr. operated one of the largest land contract brokerages in the Midwest, handing millions of dollars worth of deals after learning about the business through cable TV infomercials and seminars.

Now, even his own son has turned against him.

Rod Wolford II testified against his father during an Iowa criminal trial that ended with the elder Wolford being convicted of 17 felonies and facing up to 165 years in jail. He will be sentenced April 21.

The son as well as other witnesses told jurors in Polk County District Court that Wolford misled customers, investors and regulators in a scheme that collapsed in 2003, prosecutor George Karnas told

The younger Wolford also faces charges, Karnas said.

"They waned to something big," Karnas said. "They watched cable TV programs, were attending seminars and got to know big shots in the industry. At one time they were the largest contract home buyers in Iowa, Nebraska and parts of Minnesota."

But in the end, more than 200 home buyers were victims of a scheme that exposes the downside of land contracts.

The Wolford Group, the name of Wolford's company, has also been sued by the Iowa Attorney General.

According to statements from the attorney general The Wolford Group "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."

Both the attorney general and Karnas said phony appraisals were used in the Wolford scheme.

The state alleged that the Wolfords would offer to buy homes in cash "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 Wolfords would use phony appraisals to buy houses at low prices and then sell them to people at inflated prices. Often the buyers had poor credit and finances, and because the interest rates were so high could not often make the payments.

"In some case ... Wolford did receive proceeds from some buyers who did manage to obtain financing, but failed to pay mortgages outstanding in the seller's names," the attorney general office's said.

Karnas said prosecutors found 21 instances when mortgage were not paid off.

"They churned properties until they found someone who could qualify," Karnas said. "But they would miss a payment or two, (Wolford) would kick them out of the house and sell it again."

The Des Moines Citizens for Community Improvement, or CCI, a consumer advocacy group that helped expose the Wolford Group's problems, told of how a deal with the company worked.

In 2002 a woman named Doreen Johnson was "misled" into signing an "interest only contract" with a five-year balloon payment, the group said in a statement.

"In April 2001 she made a $22,900 down payment on a property Wolford sold to her for $72,900," CCI said. "She also put $7,000 worth of home improvements into the property.

"As a result she owed Wolford $50,000 after her down payment and would still owe $50,000 when her balloon payment came due in June 2006," CCI said. "In January 2003 CCI hired an independent appraiser who appraised the property to be worth only $45,000 -- almost $30,000 less than she paid."

The Wolford Group, which declared bankruptcy in 2003, was also accused of securities theft and fraud by misleading 48 investors who invested about $3.3 million in promissory notes sold by Wolford.

Investors were promised returns of up to 30 percent and the repayment of principal in 30 to 60 days, according to the attorney general.

But the securities were unregistered, carried substantially higher risk that Wolford revealed and money raised was used to pay off mortgages when investors were told the money would be used for down payments or repairs on homes.

Patrick Crowley is a feature journalist and blogger for He is also a reporter, blogger and columnist for The Cincinnati Enquirer.
e-mail Patrick at: [email protected]

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