Illinois AG sues 2 Chicago firms for mortgage rescue fraud
The Illinois Attorney General's office filed suit Wednesday against two Chicago firms that it alleges committed mortgage rescue fraud by charging 40 homeowners upfront fees for services that were not adequately, or ever, provided.
One lawsuit, filed against Avatar Realty Group and company president Arthur Monroe, alleges that the company advertised its services in the Polish community. It accuses Monroe of repeatedly lying to consumers about his ability to help them, while advising them to stop making their mortgage payments.
The suit also lists as defendants Monroe Realty & Financial Enterprises Inc. and Monroe Realty Corp., two former names for Avatar Realty.
The suit charges that Monroe improperly collected more than $37,000 in upfront frees from homeowners in Cook, DuPage, Lake and Boone counties.
The payment of upfront fees for assistance in securing a mortgage loan modification is prohibited in Illinois.
Monroe said he will fight the suit. "This is a witch hunt," Monroe said. "Once the (loan modification application) package was ready, I gave them the package and provided my services, they paid me for it. There was no upfront free. This allegation is not true, and I have all the documentation to prove it."
In June, the Illinois Department of Financial and Professional Regulation issued a cease-and-desist order against Avatar and Monroe for unlicensed loan modification activities and fined the firm $25,000 for violating the Residential Mortgage License Act of 1987.
In the other suit, filed against Skyline Capital Inc. and company president Rahul Shah, the state charges that the company improperly collected more than $23,000 in fees from homeowners in Cook, DuPage, McHenry, Kendall and Will counties to help secure mortgage modifications. The complaint also states that despite a provision in Skyline Capital's contract that consumers would receive full refunds if modifications weren't obtained, homeowners told Attorney General Lisa Madigan's office that they never received the promised refunds.
Both lawsuits, filed in Cook County Circuit Court, charge that the companies violated the Illinois Consumer Fraud Act and the Mortgage Fraud Rescue Act and seek to shutter the businesses, prohibit Monroe and Shah from offering mortgage rescue services in Illinois and obtain restitution for the homeowners involved.
Efforts to reach Shah were unsuccessful.