Illinois’ attorney general Monday announced two lawsuits against companies accused of taking homes from homeowners facing foreclosure.
Calling mortgage fraud “a cancer that is eating away at our neighborhoods,” Attorney General Lisa Madigan announced the lawsuits Monday.
The attorney general charged that a Chicago company, Advantage Mortgage Consulting, promised to help two Chicago homeowners with their financial troubles but instead duped them out of property worth $469,000.
The attorney general also filed suit against a North Carolina company, HomeSavers USA Inc., and its CEO, David Moakler, alleging that they charged between $350 and $900 for helping to negotiate with lenders, but performed few, if any, services.
Madigan’s efforts join those of the legislature to combat this type of mortgage fraud. Chicago state lawmakers this month introduced a bill aimed at so-called “mortgage rescuers”–con artists who promise to bail out cash-strapped families but often end up taking their homes instead.
Madigan, State Sen. Jacqueline Collins and State Rep. Marlow Colvin spearheaded the bill
At a press conference announcing the legal actions, the attorney general introduced a woman who she said had fallen prey to such a scheme.
Tangie Chaffin, a single mother who works as a data-entry clerk for the Chicago Police Department, said when she fell behind in her $650-a-month mortgage payments, she sought help from Advantage, eventually giving the company power of attorney and the deed to her home, media reports said.
Madigan said the Mortgage Rescue Fraud Prevention Act, is tailored to target the two most common types of mortgage fraud rescue schemes. First, it targets “distressed property consultants” who offer phantom help to homeowners, usually promising to “buy them time” or “save the home” by negotiating with the homeowners’ creditors.
In exchange for upfront fees, the consultants do nothing and abandon the homeowner to a fate that might have been prevented with legitimate professional intervention.
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