The Attorney’s General office filed lawsuits Tuesday against two companies who offered audits for a fee to struggling homeowners looking to avoid foreclosure and reduce their mortgages.
Mortgage FACS Corporation and Enlightened LLC offered “mortgage loan audits,” promising to review if the homeowner complied with state and federal lending regulations and locate any errors that would assist in a lower monthly mortgage payment or loan modification, according to the attorney general’s office.
The scam targeted Chicago area homeowners behind on mortgage payments or already facing foreclosure, the attorney’s general office said. The victims lived in Cook, DuPage and Will counties.
The homeowners paid the upfront fee, often in the hundreds of dollars, and never received any assistance, the attorney general’s office said.
“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,” Attorney General Lisa 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.”
The suits seek the court to ban the companies from operating in Illinois, void any pending contracts with homeowners and provide restitution. The suits also ask the court to assess penalties based on violations of the Illinois Consumer Fraud and Deceptive Business Practices Act.