Madigan sues 3 local firms over mortgage modifications
The state attorney general's office filed suit Monday against three Chicago-area firms and their principals who allegedly operated mortgage rescue schemes that conned homeowners out of more than $44,000 in upfront fees and provided them with little or no help.
The cases share many similarities, including preying on consumers for whom English is a second language, collecting upfront fees and telling consumers to ignore any mail sent to them by their mortgage companies.
In Illinois, it is illegal to charge consumers upfront fees for loan modification services not yet provided. In at least one of the cases, a homeowner lost his home to foreclosure as a result of the purported fraud.
"People are desperate to save their home, and they're so intimidated by even the thought of trying to deal with their bank," said Illinois Atty. Gen. Lisa Madigan. "For many people, they got a mortgage through a broker and their only contact since then has been writing a check. The idea that they have to find someone to interface with, especially when they're not fluent, scares them. When someone says 'I can handle this, give me $500 and I can get you a modification,' they are relieved. People don't think they can do this on their own."
In one case, filed against Acceptance Financial Corp. and its president, Anatoly Nirshberg, the state alleged that the company advertised its services to Polish and Russian homeowners and in meeting with clients, promised it could secure loan modifications for them for upfront fees of $750 to $3,000. Consumers lost more than $14,800 in the scheme, the state alleges in the suit filed in Cook County Circuit Court.
In another case filed in Cook County, the state alleged that Elite Outsourcing Services Inc., and two of its employees, Kenneth Thompson and Wesley Thompson, illegally accepted funds from at least 100 consumers who sought to have their mortgages modified. In some cases, according to the suit, the company accepted the payments and then referred the homeowners to the attorney general's office for assistance.
Efforts to reach Acceptance and Elite were unsuccessful.
A third case, filed in Kane Court Circuit Court, charges that International Embassy Realty Inc., and its president, Sandro Rodriguez, targeted Hispanic homeowners and accepted more than $16,000 in upfront fees from homeowners. In September, the Illinois Department of Financial and Professional Regulation revoked Rodriguez's license as a mortgage loan originator for engaging in unlawful loan modification activities and fined him $10,000.
Rodriguez said he had been served with the suit but declined to comment until he had spoken with his attorney.
The lawsuits seek to shut down the companies, obtain restitution for affected consumers and pay civil fines.
Since 2006, the attorney general's office has filed 50 suits alleging mortgage rescue scams that have resulted in 28 injunctions.