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A local man has been disciplined for his part in an alleged $7.7 million scheme to defraud lenders on a 27-unit condominium building, of which all the units are in foreclosure.
Jeff Townsend of Glendale Heights was involved in the scheme with five other loan originators, a title company, seven mortgage companies and two appraisers, according to a press release from the Illinois Department of Financial and Professional Regulation’s Mortgage Fraud Task Force.
According to IDFPR’s investigation, most if not all of the units in a building at 4725 S. Michigan, Chicago, were alleged to have been sold to straw buyers, beginning in late 2006 and continuing through October 2007, at artificially inflated prices based on fraudulent appraisals. The buyers allegedly would sign loan documents stating that the address was going to be their primary residence when they had no intention of ever living there. At least one of the alleged straw buyers purchased five units claiming each unit was her primary residence. Oftentimes, the sellers would allegedly ask the buyers to risk their good credit for generous cash kickbacks or on the promise that a bevy of renters will cover the cost of the mortgage. In the end, the buyers failed to make payments, defaulted on their loans and the lenders began the foreclosure process.
Townsend had his license revoked and was fined $20,000.
The IDFPR’s division of banking also has revoked, fined and/or disciplined the mortgage company licenses of AM Mortgage Corp., Lincolnwood; Atlas Preferred LLC, Chicago; Exclusive Bancorp Inc., Lincolnwood; KRK Financial Services Inc., Chicago; and Elite Financial Investments Inc., Oak Brook.
Two other mortgage companies, C.D.K. USA Mortgage in Chicago and Country Mortgage
Services Inc. in Arlington Heights, were cited for operating on previously revoked licenses.
Besides Townsend, other loan originators involved include Theodore Cardenas of Schaumburg; John Karapournos of Skokie; Razzak Khader of Morton Grove; Zarak Khan of Chicago; Sara Mian of Niles; and Arfeen S. Ahmed, no address given.
IDFPR’s Division of Professional Regulation also filed formal complaints against real estate appraisers Choudhry Z. Muzaffar and Jason M. Powell, both of Chicago, for allegedly inflating the value of the properties by $50,000 to $75,000, failing to select appropriate comparable sales, and failing to accurately reflect certain information necessary for a valid appraisal.
Also, ENH Services LLC, Zeal Management LLC, and Eliot Higueros were cited with unlicensed practice as real estate brokers for accepting commissions on the sale of the condos. In multiple instances, ENH and Zeal are alleged to have received commissions of more than $20,000 on the sale of single units.
Mortgage Fraud Task Force officials said they were tipped off by a confidential informant.
A local man has been disciplined for his part in an alleged $7.7 million scheme to defraud lenders on a 27-unit condominium building, of which all the units are in foreclosure.
Jeff Townsend of Glendale Heights was involved in the scheme with five other loan originators, a title company, seven mortgage companies and two appraisers, according to a press release from the Illinois Department of Financial and Professional Regulation’s Mortgage Fraud Task Force.
According to IDFPR’s investigation, most if not all of the units in a building at 4725 S. Michigan, Chicago, were alleged to have been sold to straw buyers, beginning in late 2006 and continuing through October 2007, at artificially inflated prices based on fraudulent appraisals. The buyers allegedly would sign loan documents stating that the address was going to be their primary residence when they had no intention of ever living there. At least one of the alleged straw buyers purchased five units claiming each unit was her primary residence. Oftentimes, the sellers would allegedly ask the buyers to risk their good credit for generous cash kickbacks or on the promise that a bevy of renters will cover the cost of the mortgage. In the end, the buyers failed to make payments, defaulted on their loans and the lenders began the foreclosure process.
Townsend had his license revoked and was fined $20,000.
The IDFPR’s division of banking also has revoked, fined and/or disciplined the mortgage company licenses of AM Mortgage Corp., Lincolnwood; Atlas Preferred LLC, Chicago; Exclusive Bancorp Inc., Lincolnwood; KRK Financial Services Inc., Chicago; and Elite Financial Investments Inc., Oak Brook.
Two other mortgage companies, C.D.K. USA Mortgage in Chicago and Country Mortgage
Services Inc. in Arlington Heights, were cited for operating on previously revoked licenses.
Besides Townsend, other loan originators involved include Theodore Cardenas of Schaumburg; John Karapournos of Skokie; Razzak Khader of Morton Grove; Zarak Khan of Chicago; Sara Mian of Niles; and Arfeen S. Ahmed, no address given.
IDFPR’s Division of Professional Regulation also filed formal complaints against real estate appraisers Choudhry Z. Muzaffar and Jason M. Powell, both of Chicago, for allegedly inflating the value of the properties by $50,000 to $75,000, failing to select appropriate comparable sales, and failing to accurately reflect certain information necessary for a valid appraisal.
Also, ENH Services LLC, Zeal Management LLC, and Eliot Higueros were cited with unlicensed practice as real estate brokers for accepting commissions on the sale of the condos. In multiple instances, ENH and Zeal are alleged to have received commissions of more than $20,000 on the sale of single units.
Mortgage Fraud Task Force officials said they were tipped off by a confidential informant.
