Friday, October 21, 2011

Illinois Lawsuits Filed Against Companies Allegedly Involved in Chicago Mortgage Foreclosure Scams

In these trying economic times, our Oak Parkforeclosure defense attorneys know that many Chicagoland consumers may have reached out to various debt and mortgage relief companies to help assist them with their financial struggles.  Illinois homeowners should be able to rest assured that the companies that purport to help struggling Americans during times of great need are treating consumers honestly.  However, that is not always the case. 

Unfortunately, the Emerson Law Firm has learned about another incident of scamming in connection to Chicago mortgageforeclosure.  Illinois Attorney General Lisa Madigan filed lawsuits on Tuesday against several Chicago-area companies allegedly involved in fraudulent mortgage rescue and debt settlement schemes that cheated consumers out of thousands of dollars.  The suit alleges that the companies illegally charged their customers when they failed to provide little, if any, help to avoid foreclosure. 

According to a press release issued by the Illinois Attorney General’s Office, the suits were filed in Cook County against defendants Debt Care Financial Group Inc., in Chicago, and its president Malgorzata Baran, and Starlex Financial Consulting LLC and Flagship Mortgage Corporation, in Deerfield, and employees Jeffrey M. Entratter and Neil Borland.  The state also filed suit against E.A.C. Financial LLC, based in Chicago, and its owners Everett D. Pope and Colbi Andry.

Instead of helping their customers manage their finances, the companies allegedly took large upfront fees, but did little to provide the promised services.  The companies offered a variety of financial services, such as helping consumers to obtain loan modifications on their mortgages or to reduce their growing debt by negotiating with creditors.  Attorney General Madigan stated that the companies were “nothing more than scam operations.”  In fact, the companies potentially made foreclosure more likely for many of their customers and put Chicago residents into deeper debt.

In the lawsuit against Malgorzata Baran and Debt Care Financial Group, the Attorney General Office claims that the defendants advertised debt settlement and loan modification services, promising to reduce debt by 50 to 70 percent.  The company charged customers at least $66,000 for work that was never performed and repeatedly ignored requests for refunds.  In some cases, Baran also harassed or intimidated these consumers.

The lawsuit against E.A.C. Financial LLC alleges that consumers were charged large fees up front to obtain assistance in modifying a loan or settling their debt.  Consumers were told to stop making payments to their creditors while the alleged services were being provided, which left some consumers facing higher payments in the end since the company ultimately provided little assistance.
The Attorney General’s Office is asking the courts to shut down the fraudulent businesses and to obtain restitution for consumers.  

Our Chicago mortgage foreclosure lawyers have worked with many families to help them avoid foreclosure and manage their debt.  We find the actions of these scheming companies to be reprehensible.  It is bad enough that banks and other lenders deceived consumers, the courts, and regulators with robo-signing and other fraudulent mortgage foreclosure tactics, but it is particularly concerning when those who claim to work on behalf of consumers actually act to swindle them. 

Sadly, many Chicago homeowners fail to seek help—often because they feel overwhelmed, worry that their situation is hopeless, or fear being judged—but obtaining assistance from a legal professional can help ease consumers’ worries and get them back onto the right track toward financial stability.  Please consider stopping by our office or visiting us online for a legal consultation from a qualified professional at the Emerson Law Firm. 

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