CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan filed a lawsuit on Tuesday against a Chicago man and five home repair and mortgage companies over an alleged scheme targeting African-American consumers that resulted in taking $1.3 million in equity from the homes of at least 36 consumers.
The suit charges Mark Diamond and home repair and remodeling companies United Construction of America, Inc., United Residential Services and Real Estate Inc., and Skyway Builders #1, Inc., and two finance companies, OSI Financial Services, Inc., and Harbor Financial Group, Ltd., with a scheme to defraud homeowners and strip equity from their homes.
"These defendants purposely solicit homeowners in predominantly African-American neighborhoods, luring unsuspecting borrowers into deceptive refinancing loans and home repair contracts that they cannot afford and did not necessarily need," Madigan said.
"Now, many of the victims are at risk of foreclosure and some have already lost their homes as a result of this deception."
Allegedly, Dimaond seeks out elderly and African-American consumers and offers to refinance their mortgages with lower interest rates or lower monthly payments, yet inflates their income and assets on loan applications, which also contributes to their inability to afford the loans.
The Democrat's lawsuit further alleges that Diamond employs deceptive high-pressure tactics to ensure that consumers do not object to the altered loan terms.
When consumers question the loan terms, Diamond allegedly offers to refinance consumers' loans one year later but then usually fails to do so, unless the consumer still has equity in the home a year later, Madigan said.
The Attorney General seeks to permanently enjoin Diamond and all companies affiliated with him from operating in Illinois and to revoke any licenses that he or the companies hold.
In addition, Madigan's suit asks the courts to rescind all consumers' contracts and award restitution to consumers. She also asks the court to order the defendants to pay civil penalties 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 the costs of the investigation and prosecution of the case.