Chicago, ILÂ â€” Illinois Attorney General Lisa Madigan took action against three Chicago area companies, filing her 50th lawsuit against mortgage rescue schemes that con distraught homeowners by charging thousands of dollars in upfront fees with false promises of helping them avoid foreclosure.
Madiganâ€™s crackdown has established Illinois as the most aggressive state in the nation to combat the dramatic rise of mortgage rescue schemes that have emerged in the wake of the national housing crisis. The 50 lawsuits filed by the Attorney General have so far resulted in 28 injunctions against scam operations and the courtsâ€™ ordering defendants to pay back $2 million to affected homeowners.
Additionally, Madigan has issued 622 cease and desist letters to mortgage operations ordering them to stop charging homeowners upfront payments for rescue services. In Illinois, it is illegal to accept upfront fees for assisting homeowners with loan modification services.
â€œThese entities are nothing more than scam operations, illegally charging consumers huge sums in return for no help,â€ Attorney General Madigan said. â€œTheyâ€™ve scammed families out of thousands of dollars while putting them at even higher risk for foreclosure.â€
Commonly referred to as â€œmortgage â€˜rescueâ€™ consultants,â€ the schemes are run by con artists who promise phantom help. They claim that, for a hefty fee, they can save a distressed borrowerâ€™s home by negotiating deals with a homeownerâ€™s lender, when in reality, these â€œconsultantsâ€ do nothing they promised. As a result, homeowners typically get further behind on their mortgage payments and wind up on a faster track to foreclosure.Â
In three lawsuits filed today, Madigan alleges companies took more than $44,000 upfront from consumers with promises to help them obtain a loan modification on their mortgage, when in fact, no work was performed on the consumersâ€™ behalf.
The lawsuits were filed in Cook County Circuit Court against Acceptance Financial Corporation, in Northbrook, and Elite Outsourcing Services Inc., based in Midlothian. Madigan also filed suit in Kane County Circuit Court against International Embassy Realty Inc., in Elgin.
In Madiganâ€™s lawsuit against Acceptance Financial and Anatoly Nirshberg, its president, consumers lost more than $14,800 in the scheme. Nirshberg allegedly targeted mostly Polish and Russian immigrant communities and frequently advertised on Polish radio and Russian news outlets that he could help secure loan modifications in only a few monthsâ€”but for an upfront fee from $750 to $3,000.
Elite Outsourcing Services and owner and operator Kenneth Thompson, a Monee man who falsely represents himself as an attorney, accepted illegal upfront fees from at least 100 homeowners seeking loan modifications, according to Madiganâ€™s lawsuit. Elite operators allegedly even referred files to the Attorney Generalâ€™s office as a false means of providing loan modification services to justify upfront payments. Consumers reported losing more than $13,000 in the scheme
In Madiganâ€™s third lawsuit, International Embassy Realty and its president Sandro Rodriguez, of St. Charles, took in more than $16,000 in upfront fees from homeowners. Rodriguez allegedly targeted Spanish speakers and instructed homeowners to stop paying their mortgage in order to speed up the loan modification process, which put many homeowners at higher risk for foreclosure.Â
The Attorney Generalâ€™s lawsuits ask the court to shut down the operators and obtain restitution for consumers. They also seek to bar the defendants from providing mortgage rescue services in Illinois and to order the defendants to pay civil penalties for violations of the Consumer Fraud or Mortgage Rescue Fraud Act.
Attorney General Madigan urged homeowners who are struggling to stay in their homes to avoid these scam operations and instead contact her Homeowner Helpline, (866) 544-7151, for free, legitimate help on avoiding foreclosure, including assistance in connecting them with a HUD-certified housing counselor to work out a solution with their lenders.
Assistant Attorneys General Colleen Bisher, E. Paige Boggs and Michele A. Casey are handling the cases for Madiganâ€™s Consumer Fraud Bureau.