Tuesday, November 25, 2008
Illinois AG Sues 7 Mortgage Rescue Companies
Seven new lawsuits against so-called mortgage “rescue” companies have been filed. The following defendants were named in the lawsuits:
National Foreclosure Counseling Services, 7954 Baymeadows Way, Jacksonville, Fla.;
Foreclosure Solutions, 488 Pine Street, Burlington, Wis.;
Homestead Protection Services, 151 Southhall Lane, Maitland, Fla.;
Home Foreclosure Solutions, 17550 South Williamsburg Drive, Plainfield, Ill;
Foreclosure Experts, 220 S. State Street, Chicago, Ill.
Mason Capital Group, 18375 Ventura Blvd., Tarzana, Ca.
StopMyForeclosure.net, 3914 Abbotsford Road, Rockford, Ill.
In each of the lawsuits, the Illinois Attorney General Madigan alleges that con artists targeted homeowners who have fallen behind on their mortgage payments and promised that for an upfront fee, the scammers could negotiate with the mortgage lenders to reduced the payments and save their homes. However, according to Madigan’s complaints, these “consultants” collected the upfront fees, they failed to negotiate or perform any services on behalf of the homeowners, leaving consumers at risk of losing their home to foreclosure.
This tactic violates Illinois’ Mortgage Rescue Fraud Act, which prohibits mortgage rescue companies from requiring payment from consumers prior to completing all the terms of a rescue contract. The law also requires rescue businesses to fully disclose homeowner the exact terms and nature of the proposed rescue services and the homeowner’s right to cancel the contract. With these new filings, Madigan has brought lawsuits against 22 mortgage rescue fraud companies.
In each suit, the Attorney General is seeking a permanent injunction preventing the defendants from engaging in mortgage rescue. Madigan is also asking the courts to award restitution to consumers and to order each defendant to pay a civil penalty of $50,000, additional penalties of $50,000 for each act committed with intent to defraud an additional $10,000 for each act committed against a senior citizen, and costs for investigation and prosecution of the cases.
Madigan urged consumers to use caution when seeking help if they are at risk of losing their homes and to seek reputable sources for assistance. “Consumers need to resist offers of a ‘rescue,’” Madigan said. “These scam artists prey on desperate homeowners who are struggling to save their homes. I urge consumer avoid ‘rescue’ offers and, instead, reach out to trusted sources for help. My office assists homeowners attempting to avoid foreclosure. Anyone looking for help should call us immediately.”
Homeowners Should Watch Out For “Title Taking” Schemes
As she urged homeowners to avoid falling prey to mortgage rescue fraud, Madigan the opportunity to outline one type of rescue fraud scheme. In “title taking” scheme con artists convince homeowners to sign over the title of their home. The original owners then make “rent payments” to the rescue fraud scammer based on the promise that the scam artist will sign the home back over to the original owner at a later date after the home value increases and/or the homeowner’s credit is repaired. Usually, con artist is long gone before the victim realizes they’ve lost both their home and the equity that they had established over the time that they owned the home.
“This is especially devastating to older homeowners who often have their entire life savings wrapped up in their home’s equity,” said Madigan.
Homeowners Should Make the Call To Find Reputable Help
Madigan reminded Illinoisans not to wait for a rescue fraud scheme to happen to them. “You do not have to be a victim,” she said. “There are a lot of reputable resources available, free of charge, and I urge homeowners to reach out for help.”
To prevent homeowners in crisis from losing their homes to foreclosure, Madigan urges them to immediately contact:
Attorney General Madigan’s Homeowners’ Referral Helpline at 1-866-544-7151 for guidance on avoiding mortgage foreclosure; A HUD-certified housing counselor for assistance in working out a solution with the lender (Madigan’s office can provide names and numbers for these counselors); and Their mortgage company, whose contact information is found on their month mortgage statement.
Madigan also directed homeowners to her Web site at http://www.IllinoisAttorneyGeneral.gov, to access her Mortgage Rescue Fraud Brochure and her Illinois Mortgage Lending Guide resource manual containing step-by-step instructions for those struggling to make loan payments and a list of HUD-certified counseling agencies that offer default counseling services. Homeowners who do not have easy access to the Internet should call the Attorney General’s Helpline, to quickly receive the guide or the brochure by mail.
Assistant Attorneys General Jennifer Franklin, Michelle Garcia, Junko Minami, Elizab Phalen, Rebecca Pruitt and Kimberly Slider are handling these cases for Attorney General Madigan’s Consumer Fraud Bureau.
mortgage fraud
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Erie Area Mortgage Broker Gets Prison in Fraud Case
GoErie.com - Erie, PA
Shortly before receiving a nearly three-year federal prison sentence, former mortgage office manager Francis R. Conti told the judge he never meant to defraud any of the homeowners caught up in a widespread local mortgage-fraud scheme.
Three Former Portland-Area Mortgage Brokers Face Fraud Charges
OregonLive.com - Portland, OR
Joel D. Surprenant, Michael Duc Han and Benjamin Lucian Lucescu all were charged with one count of obtaining mortgage loans through materially false and fraudulent pretenses.
Shaker Pair Pleads Guilty to Mortgage Fraud Charges
Cleveland.com - Cleveland, OH
Two Shaker Heights residents recently pleaded guilty to charges involving a mortgage scheme with seven area houses and $3 million in fraudulent loans.
Feds File Charges in Five Mortgage Fraud Cases
Chicago Breaking News - Tribune - Chicago, IL
Federal charges were filed today against 37 people and four companies in five separate mortgage fraud cases.
Feds Fighting Back
Contra Costa Times - Walnut Creek, CA
Mortgage fraud has increased so dramatically in the San Joaquin Valley that a task force of federal, state and local agencies has been formed to fight back.
Private Investigator Sees Rise in Mortgage Fraud Due to Economy
PR Web - Ferndale, WA
In the past 12 months his firm has been retained to conduct over 300 mortgage fraud investigations, a 100% increase from 2007.
Former UGA, NFL Football Player Arthur Marshall Charged With Mortgage Fraud Claims
WJBF-TV - Augusta, GA
He is also accused of defrauding three banks in obtaining loans for seven different properties in Columbia and Richmond Counties.
Cuomo Subpoenas Loan Modification Companies
New York Times - United States
“The entire industry is a scam, in my opinion,” Mr. Cuomo said Tuesday. “These are services that homeowners don’t need to pay for in the first place.”
Defendant Pleads Guilty to Wire Fraud Relating to Mortgage Fraud Scheme
Imperial Valley News - Holtville, CA
Scavitti admitted that between 2003 and August 2008 he unlawfully diverted mortgage funds that were wire transferred into his client office account to his own personal benefit, resulting in losses in excess of $2.5 million.
Fed Drug Report: Double Trouble for Metro Chicago
ABC7Chicago.com - IL
...Chicago street gang members run a network of legitimate businesses and have engineered mortgage fraud schemes, both to launder drug proceeds...
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
Update - US v. F. Jeffrey Miller, et al.
Miller II: Judge Julie Robinson has ruled in favor of the defense motion granting a continuance for sentencing of the 3 convicted defendants: F. Jeffrey Miller, Steve Vanatta and Hallie Irvin. The three will now be sentenced after ruling on post trial motions set for August 10, 2009.
Vanatta has been in custody for over 2 years. Vanetta filed a motion for his release pending sentencing. That motion was denied.
Miller remains free pending his sentencing. He has hired a new attorney who filed a motion to delay Miller's sentencing. In one post trial motion, the defense argues as to what assets are subject to seizure.
Defendant Todd Earnshaw is a Kansas City real estate Broker (and brother in law of Miller). Earnshaw has been indicted in what is commonly referred to as Miller I. A trial date for that matter has been set for January, 2010 in Topeka, Kansas.
The Government filed a motion to revoke Earnshaw's bond and remand him to custody while he awaits trial after learning that he allegedly committed the state crimes of Driving Under the Influence, Handicap Parking Violation and Failure to Control Speed to Avoid a Collision while on pretrial release. Notwithstanding finding that probable cause existed to believe that Earnshaw committed the aforementioned state crimes, Judge Robinson denied the motion, but ordered several strict conditions that Earnshaw must follow pending his trial.
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