Madigan sues 4 companies, alleging mortgage rescue scams

Illinois Attorney General Lisa Madigan filed lawsuits against four Chicago area companies and attorneys alleging they operated fraudulent mortgage rescue or loan modification schemes that illegally charged consumers for little if any help to avoid foreclosure.

The lawsuits were filed in Cook County Circuit Court against ZeTrust Legal Services of Chicago, Woodridge-based Legal Modification Network LLC, Loan Litigators International LLC, which operated out of Lombard but is now defunct and Exelpol Management & Consulting Inc., a dissolved corporation that was based in Schaumburg.

Cook County State’s Attorney Anita Alvarez’s office filed a similar lawsuit against an Arlington Heights-based loan modification and debt settlement company, Legal Housing and Debt Advisor LLC.

Madigan’s and Alvarez’s offices are part of a multi-agency effort targeting Illinois attorneys and loan modification operators who illegally exploit a law that allows lawyers to collect upfront fees from homeowners for mortgage rescue services in the course of legitimate legal work, state officials said. The businesses use attorneys as the face of their operations in order to charge upfront fees, but in reality the attorneys performed no legal services for the homeowners, Madigan alleged in a statement.

“These operators are scamming families out of thousands of dollars and actually making foreclosure more likely,” she said.

The Attorney General’s lawsuits shut downs of the businesses, restitution for 76 consumers and the barring of the defendants from providing mortgage rescue services in Illinois. The lawsuits also seek to order each defendant to pay a civil penalty of $50,000 and additional penalties of $50,000 for each act committed with intent to defraud.

The Illinois Department of Financial and Professional Regulation, which also is part of the task force, has investigated nearly 200 companies since December 2009 for illegal or unlicensed activities involving loan modifications and other financial transactions, according to state officials. The cases have led to fines in excess of $600,000.