Ill. AG files suits against forensic loan audit schemes
CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan filed lawsuits Tuesday against two companies that allegedly promised loan assistance to struggling homeowners while adding to their targets' financial difficulties.
Mortgage FACS Corporation and Enlightened LLC, doing business as A.M.T. Auditing Services LLC and the Mortgage Auditing Program, allegedly engaged in a relatively new variation on mortgage rescue fraud in which con artists falsely claim that an audit of a homeowner's mortgage will find errors and reduce monthly mortgage payments. The companies allegedly posed as professionals and charged illegal upfront fees to conduct the so-called mortgage loan audits.
Most of the alleged victims of the scam paid upfront fees and received no assistance in modifying their mortgage payments.
"These schemes put a new twist on the mortgage rescue fraud scam but generate the same result by charging struggling homeowners huge sums of money for nothing in return," Madigan said. "An audit can almost never be used to negotiate a lower rate with your lender. The best way homeowners can work to secure a loan modification is through a legitimate HUD-certified housing counselor, which provides services for free."
Madigan alleges that Mortgage FACS deliberately targeted homeowners who were behind on their payments or facing foreclosure, marketed its forensic mortgage loan audits as a way to obtain loan modifications and charged victims hundreds of dollars for the audits. Some victims of the alleged scam saw no change in their mortgage payments as a result of the audits.
Enlightened LLC allegedly employed workers with no expertise in mortgages and relied on third-party software to find mortgage errors, signed up consumers for a mandatory software trial without their consent and later charged the consumers each month for the software. Madigan alleges that few Enlightened LLC consumers received money back from the audit.
In both lawsuits, Madigan requests that the court ban the companies from operating in Illinois, assess penalties based on violations of the Illinois Consumer Fraud and Deceptive Practices Act, void any pending contracts and provide restitution to victims.