Friday, February 10, 2012

Illinois AG Files New Lawsuits Targeting Companies Using Fraudulent Practices In Foreclosing On Homeowners In Crisis

On Monday, Illinois Attorney General Lisa Madigan filed another lawsuit against a company involved in alleged mortgage fraud.  In a press release, the AG’s Office stated that Nationwide Title Clearing (NTC)—a Florida-based company that prepares documents for mortgage servicers to use against borrowers who are in default, foreclosure, or bankruptcy—filed faulty documents with Illinois county recorders.  NTC works for many of the largest lenders and mortgage servicers.

AG Madigan condemned the company’s actions, stating, “The practices that NTC used were a key contributor to the mortgage crisis by undermining the integrity and accuracy of the mortgage servicing and foreclosure process.”  The practice to which AG Madigan refers has commonly become known as “robo-signing.”  During the housing crisis, reports surfaced that workers at companies involved in Illinois mortgage foreclosure were mass producing documents related to foreclosure or other related legal proceedings, often to hurry along the processing of mortgages and foreclosures.  Our Oak Park foreclosure defense lawyers know many workers were signing foreclosure papers without reading them and/or without verifying the accuracy of the information contained in the documents.  (To read more about the fraudulent practice of robo-signing in Illinois, see our prior post here.)  When they signed the documents, employees swore they possessed “personal knowledge” of the facts contained in the documents.  The documents were then filed in court, and judges and court officials relied on them in processing foreclosures. 

Rather than possessing personal knowledge, however, it turns out that employees were merely “rubber stamping” the documents so that foreclosure companies could push through as a many foreclosures as possible.

The lawsuit, which was filed in Cook County Circuit Court, alleges numerous violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Uniform Deceptive Trade Practices Act.  In filing the lawsuit, AG Madigan hopes the court will require NTC to review and correct all documents it unlawfully created and recorded in Illinois, and pay back all revenues, profits and gains achieved in whole or in part due to unlawful practices.  The suit also seeks civil penalties of up to $50,000 per violation against the company.

AG Madigan’s lawsuit against NTC is only one among many that seeks to address the widespread and extremely damaging fraudulent practices that contributed to the nation’s financial meltdown.  Those working in our area to help residents fight Oak Park and River Forest mortgage foreclosure—representing homeowners’ interests in a short sale or home purchase, or evaluating a consumer’s bankruptcy options—know that AG Madigan has actively pursued companies and other bad actors that contributed to the financial crisis.  In addition to suing NTC, the Illinois AG’s Office also recently sued the national credit ratings agency Standard & Poor’s for its fraudulent role in assigning high ratings to risky mortgage-backed investments in the years leading up to the housing market crash.  That suit alleges that Standard & Poor’s “compromised its independence as a ratings agency by doling out high ratings to unworthy, risky investments as a corporate strategy to increase its revenue and market share.”

See Our Related Blog Posts:

Alleged Robo-Signers Indicted for Forging Mortgage Foreclosure Documents

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