Illinois AG Files Civil Suit Against Pair For Allegedly Running Sale Leaseback Foreclosure Rescue Racket That Targeted Senior Citizens

In Chicago, Illinois, Courthouse News Service reports:

• Two con artists promised to save distressed homeowners' houses from foreclosure, then tricked them into signing away their deeds, the Illinois attorney general says in Cook County Court. The state claims Warren Jackson and Yolanda King, and their companies W2X, PTU I, Y2X, and Goldburg Bail-Out, selected their victims "by reviewing Illinois foreclosure filings." Attorney General Lisa Madigan said the lawsuit came in response to eight complaints to her office.

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• Jackson and King promised to help homeowners refinance mortgage loans and stop foreclosure proceedings, then would "take the title from the homeowner's property and strip almost all of the homeowner's equity," Madigan claims in the lawsuit.(1) The "equity stripping scheme" targeted senior citizens with little understanding of the residential mortgage loan industry, according to the complaint.

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• Most victims were unable to buy back their homes, due largely to the lost equity and the exorbitant fees that King and Jackson took without their victims' knowledge, and for consulting work they never performed, according to the complaint. The complaint does not estimate the total damages done. Madigan demands restitution for the victims and civil penalties of $50,000 per violation of the [Illinois] Mortgage Rescue Fraud Act.

For more, see AG Alleges Heartless Mortgage Frauds.

For the Illinois AG press release, see Attorney General Madigan Joins U.S. Attorney General Holder To Announce National Sweep Against Mortgage-Related Fraud (Madigan Files Two Lawsuits as Part of Operation Stolen Dreams Initiative).

For the lawsuit, see People v. Jackson, et al.

(1) According to the Illinois AG lawsuit (paragraphs 21-24):

• In return for the loans, defendants require the homeowners to sign over their houses to defendants or someone affiliated with defendants. In some cases, however, the homeowners do not realize that they are giving up their homes. Instead, they believe that defendants Jackson and King, through defendants W2X, Y 2 X and PTU I, have merely refinanced their mortgage. They think they are making their 'mortgage' payments to defendants, but in reality, they are just paying rent to defendants. Under the guise of signing loan documents, defendants give these homeowners warranty deeds or similar instruments that transfer title to their homes. Some homeowners are told by Defendants that they are signing over title to their properties for a one to two year period. During this period, Defendants tell the homeowners that they can stay in their properties by paying rent.

According to the complaint, individual homeowners lost from $60,000 to $149,000 of equity in their homes as a result of W2X’s fraudulent schemes.