The Illinois Attorney General has filed two lawsuits against three companies she says claim to help homeowners facing foreclosure keep their houses but that actually engage in mortgage rescue fraud.
Chicago, Il.-based Advantage Mortgage Consulting and an affiliated company, Platinum Investment Group, and HomeSavers USA are facing Atty. Gen. Lisa Madigan’s ire in state court.
In court documents, Madigan has accused Advantage and Platinum of preying on desperate Illinois homeowners by telling them that, although they could not refinance the mortgages on their houses, the homeowners could save their homes by selling the house to an investor from Platinum, renting the home back from the investor and then repurchasing it at a later date.
But instead, the lawsuit alleges — without the knowledge many of the homeowners — homes were sold using powers of attorney. The fraudulent activity stripped of thousands of dollars in equity through real estate transactions by paying Admiral, Platinum and their attorneys “substantial fees” and by creating bogus second mortgages, leaving the homeowners with only hundreds of dollars of value in their homes, according to the plaintiff.
The lawsuit said that one Illinois homeowner, an unemployed truck driver with health problems, whose investment property was sold without his knowledge or attendance at a closing, only received $28,996 for a house with more than $230,445 in equity. The lawsuit claims that another woman, a blind woman with a disabled teenage daughter, who approached the company wanting only to refinance the house she inherited from her mother, unknowingly signed documents allowing her house to be sold and then to be rented back to her.
Madigan has asked the court for an injunction forbidding Platinum and Advantage from participating in the mortgage industry and to revoke all licenses and charters that allow the companies to do business in Illinois.
But — in strongly worded, if not saucily-stated motions to dismiss, Admiral and Platinum have denied all wrongdoing and have asked the judge to throw the case out of court. “Earning a fee, thank goodness, is not improper, illegal or immoral,” Kenneth L. Gillis, Admiral’s attorney wrote in refuting the charges. He also pointed out that the company’s fees for some of the real estate transactions criticized in the lawsuit amount to less than what many real estate agents charge. Gillis said the court has scheduled a hearing in May on the motions to dismiss.
Madigan’s suit against North Carolina-based HomeSavers USA, a self-described “mortgage default assistance service,” claimed the company, while claiming to help homeowners facing foreclosure, charged homeowners to negotiate with lenders but did not perform the service.
HomeSavers did not return calls for comment.
