A recent lawsuit filed by the Illinois Attorney General’s office against several mortgage and finance companies alleges the group targeted Black homeowners on the South and West Sides in a scheme to pull equity out of 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,” said Lisa Madigan, state attorney general. “Now, many of the victims are at risk of foreclosure and some have already lost their homes as a result of this deception.”
According to the lawsuit Madigan filed in Cook County Circuit Court, Mark Diamond of Chicago, United Construction of America Inc., United Residential Services and Real Estate Inc., Skyway Builders Inc., OSI Financial Services Inc., and Harbor Financial Group, Ltd. contacted homeowners in person or over the phone and persuaded them to refinance their mortgages (promising them lower interest rates or monthly payments).
And to some victims Madigan alleges the group would then tell homeowners refinancing would give them money to make repairs – such as replacing aging roofs – to their property.
Madigan added that the scheme did not stop there. After the closings, Diamond allegedly convinced homeowners to endorse their refund checks over to him to pay for home repairs. Then Diamond would have one of his repair companies do little to no work and would often leave homeowners with outstanding loan balances for unfinished work.
And on some occasions, Diamond allegedly pocketed a portion of the money rather than completing the home repair projects.
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