Foreclosed homes listing continues to step up in Illinois, so Attorney General Lisa Madigan has been intensifying efforts against mortgage modification fraud with help from the Federal Trade Commission and the Justice Department.
In October, foreclosure postings continued to soar in Illinois, with one in every 263 households in the state getting hit with foreclosure actions. The pace of foreclosure grew sharply by more than 56 percent from the pace in September and by more than 57 percent from the pace in October last year.
With nearly 20,000 residential units notified of default or foreclosure in October, including more than 4,200 homes already repossessed by lenders, the state of Illinois ranked sixth in a chart compiled based on foreclosure rates. Of the total filings in October, 12,659 households with mortgages received lis pendens notices.
This month, Attorney General Madigan filed lawsuits against three loan modification companies, namely Loan Mod One LLC, Freedom Mortgage Team and Living Modifications Corporation. These three firms have also been operating in other states.
Madigan stated that the three modification firms collected upfront payments from distressed borrowers, promising monthly payment reduction and foreclosed homes listing prevention. But the firms failed to deliver what they promised, worsening the situations of homeowners.
The attorney general cited the Mortgage Rescue Fraud Act and asked the courts to order the firms to pay a penalty of $100,000 for each fraudulent act and an additional penalty of $10,000 for every act against a senior homeowner and to pay the costs of litigation.
In addition to establishing cases against mortgage modification fraud, Attorney General Madigan has also been promoting consumer awareness about mortgage rescue fraud. She has been urging distressed homeowners to call her office through the homeowner helpline, HUD-certified foreclosure prevention counselors and mortgage lenders.
The website of the Office of the Attorney General, IllinoisAttorneyGeneral.gov, has also been improved so that homeowners can access a mortgage lending guide and a mortgage modification fraud brochure, a loan payment assistance manual and a listing of housing counselors certified by the HUD to guide troubled homeowners.
Other attorney generals participating in nationwide efforts against home loan rescue fraud are the state attorneys of Arizona, Colorado, Florida, Connecticut, Georgia, Indiana, Michigan, Ohio and 10 other states.
As of date, Madigan has sued 31 fraudulent foreclosed homes listing prevention firms. Of these lawsuits, nine cases have resulted in decisions that returned over $1.2 million to troubled homeowners.
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