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Illinois Sues Seven Companies for Mortgage Rescue Fraud

Attorney General warns against scams targeting homeowners in trouble

November 19, 2008

Mortgage "Rescuers" • Florida Attorney General Warns Big Banks On Modifications • Ohio Sues Mortgage Servicer For 'Incompetence' • Brown Challenges Banks On 'New Wave' Of Foreclosures • California Law Cracks Down On Foreclosure Rescue • Feds And States Get Tough On Scams • FTC Continues Crackdown On Mortgage Relief Scams • Florida Sues Foreclosure "Rescuer" Targeting Hispanics for Fraud • Class Action Proceeds Against Debt-Relief Scam • States Increase Pressure On Foreclosure Consultants • New York Sues Loan Modification Company • California Puts Foreclosure Consultants On Notice • Mortgage Modification Program Off To Slow Start • Florida Sues Four Foreclosure Rescuers • California Sues Dozens Of Mortgage Rescue Scammers • Don't Put Your Hopes, Or Money, In A Loan Modification • Ohio Launches Foreclosure Rescue Crackdown • Feds Look at Tougher Foreclosure 'Rescue' Rules • California Seeks To Register Foreclosure "Consultants" • FTC Slams Fake Government Loan Rescue Operation • Ohio Puts Heat on Foreclosure Rescue Operations • California Foreclosure ‘Rescue’ Defendants Rounded Up • Missouri Joins Mortgage Scam Smackdown • Florida Targets Fraudulent Foreclosure "Rescue" • Florida Foreclosure "Rescue" Company Shut Down • Illinois Sues Seven Companies for Mortgage Rescue Fraud • California Busts Foreclosure Scam Ring • Florida Sues Foreclosure Rescue Company for Deceptive Practices • Mortgage Rescue Fraud Schemes On The Rise • Indiana Charges Mortgage Broker With Scamming Homeowners • Indiana Targets "Foreclosure Consultant" • Missouri Attorney General Takes on Foreclosure Scams • New Washington Law Protects Distressed Home Sellers • Foreclosure 'Rescue' Firm To Pay $1.2 Million To Arizona Victims • Florida Governor Signs Foreclosure Rescue Law • California Busts 'Land Grant' Foreclosure Scam Artists • California Shuts Down Mortgage Scam Artists • FTC Takes On Mortgage 'Rescue' Operations • Illinois Uses New Law to Sue Mortgage Rescue Company • Washington State Settles with Mortgage "Rescuers" • Scams and Foreclosures On the Rise • Illinois Sues Mortgage "Rescue" Companies • Mortgage Crisis? Act Now to Avoid Foreclosure • North Carolina Shuts Down Mortgage "Rescue" Operation • Illinois Shuts Down Mortgage "Rescue" Scam • Indiana Fines Mortgage "Rescue" Firm • Illinois Sues Another Mortgage Foreclosure "Rescuer" • Missouri Sues Foreclosure "Rescue" Business • Illinois Launches Offensive Against Foreclosure "Rescuers" • New York Takes On Predatory Real Estate Scams • Texas Halts Bogus Foreclosure Rescue Operation

The state of Illinois has filed seven new lawsuits against so-called mortgage "rescue" companies and warned consumers about an alarming rise in these scams that prey on vulnerable homeowners on the verge of foreclosure.

"Consumers need to resist offers of a 'rescue,'" Attorney General Lisa Madigan said. "These scam artists prey on desperate homeowners who are struggling to save their homes. I urge consumers to avoid 'rescue' offers and, instead, reach out to trusted sources for help."

In each of the lawsuits, 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 reduce the payments and save their homes. However, according to the complaints, after 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 homes 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 to a homeowner the exact terms and nature of the proposed rescue services and the homeowner's right to cancel the contract.

Lawsuits were filed against:

• 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.

• Mason Capital Group, 18375 Ventura Blvd., Tarzana, Ca.

• StopMyForeclosure.net, 3914 Abbotsford Road, Rockford, Ill.

In each suit, the state is seeking a permanent injunction preventing the defendants from engaging in mortgage rescue. The suit also asks 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 the investigation and prosecution of the cases.

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