AG Madigan sues mortgage rescue firms

CHICAGO On Tuesday, Madigan announced she filed seven lawsuits against businesses that allegedly offered false hope to homeowners on the verge of bankruptcy.

"They are some of the worst kind of predators that we see. These are people and companies that offer the false hope to vulnerable families who are struggling to keep their homes," said Attorney General Lisa Madigan.

The latest lawsuits were filed in Cook, Sangamon and Winnebago counties and target mortgage "consultants" who got contact homeowners and offer to negotiate with the lenders for a fee.

"Unfortunately, instead of saving the home, this leaves the homeowners worse off than they found them," said AG Madigan.

The newest lawsuits were filed against:

  • National Foreclosure Counseling Services in Florida
  • Foreclosure Solutions in Wisconsin
  • Homestead Protection Services in Florida
  • Home Foreclosure Solutions in Plainfield , Ill.
  • Foreclosure Experts on State Street
  • Mason Capital Group in California
  • in Rockford , Ill.
  • Carol McClelland lost her home located in the 7600- block of South Carpenter. Foreclosure Experts at 220 South State Street contacted her and said they could save her home if she would give them $1,300 up front.

    "I contacted (the consultant) and told her I was giving foreclosure notices in the mail and also court dates. She told me to disregard those things that were coming in the mail," said Carol McClelland.

    Bernice Holcomb fell behind on her mortgage payments and when Foreclosure Solutions called her, she gave them more than $2,000 to save her home. She said they did nothing.

    "It was about $2,095 I gave them total and they never talked to the mortgage company. They didn't do anything. That is a coldhearted person who would do something like that," said Holcomb.

    Holcomb was able to save her home, but lost the $2,095.

    So far, Madigan has filed 22 lawsuits against mortgage rescue firms that allegedly target homeowners who have fell behind on their mortgage payments.

    It's illegal in Illinois for mortgage rescue companies to require homeowners to pay upfront. In fact, homeowners can get help for free from a variety of agencies.

    Madigan says struggling homeowners should call their mortgage lenders to work out an arrangement and contact a HUD-certified housing counselor. To contact the homeowners helpline, call (866) 544-7151.

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