State Of Illinois Files Lawsuits Against Two Companies For Mortgage Fraud
Two lawsuits were filed by the Illinois Attorney General’s office against two companies that allegedly preyed on homeowners struggling with their mortgages into a new kind of mortgage rescue fraud in the Chicago region.
The companies, rather than promising homeowners mortgage loan modifications, allegedly presented them with mortgage loan audits, telling them that a loan audit would reduce their mortgage payments and keep them from going into foreclosure. The companies also charged illegal upfront fees that their victims paid for without getting any kind of assistance.
The FTC (Federal Trade Commission) warned folks of these so-called forensic mortgage audits, taking action against them. The agency said no evidence suggests that a forensic loan audit will assist people in getting a loan modification or any type of foreclosure relief, even if they’ve been done by a trustworthy and licensed lawyer, mortgage professional or auditor.
In one lawsuit, it’s alleged that Mortgage FACS Corp. went after Will, Cook and DuPage Counties’ homeowners who were in the foreclosure process or had fallen behind on their payments.
The suit alleges that it advertised “forensic mortgage loan audits as one way to get modification and reduce monthly payments, which would help homeowners avoid the foreclosure process. Homeowners, not suspecting the scam, paid them hundreds of dollars to do the audits.
The other suit is against Enlightened LLC, which also does business as Mortgage Auditing Program and AMT Auditing Services LLC. In it, the company informed homeowners its audits would spot savings from misapplied interest rates and payments with very little of them getting any money back. AMT offered their clients refunds if they did not find any mistakes but consumers had a hard time getting them.
AMT customers were not made aware that they were signed up for the mandatory trial of the auditing software until they were charged the monthly fees.
Both companies were unavailable for comment.
Lisa Madigan, the state’s attorney general, said these systems are putting a new spin on the mortgage rescue fraud scam – giving homeowners nothing for the money they spent for the help.
She said audits are not the answer to getting a lower rate from the lender. The single best way to get it done is to get a loan modification from a genuine HUD-certified housing counselor, which will provide the service for free.
The lawsuits look to ban the businesses from doing business in the state, provide customers with restitution, invalidate pending contracts and assess penalties.
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