CHICAGO – Only weeks after a tenant living in an apartment at 2754 W. Washington Blvd. in Chicago filed a complaint, Governor Rod R. Blagojevich’s Mortgage Fraud Task Force (MFTF) housed in the Illinois Department of Financial and Professional Regulation (IDFPR) acted to shut down two mortgage companies, revoke the registration of two loan originators, and filed formal charges against a licensed appraiser and an unlicensed real estate broker.
“In these troubled times it is important that we stop real estate professionals from using illegal schemes to take advantage of innocent homeowners and renters. The Mortgage Fraud Task Force aggressively follows up on leads regarding activities that seem questionable,” said Governor Blagojevich.
The mortgage fraud scheme was uncovered after IDFPR received a complaint from a renter in the building who became suspicious when a stranger told her that the building had been converted to condominiums and that she should start paying rent to him. She had not been offered a right of first refusal on the unit (required during a condominium conversion). The unit she lives in is in foreclosure, but its alleged owner cannot be located. A hearing on the foreclosure is scheduled for today.
The MFTF determined in the course of its investigation that multiple units in the building had been purchased by individuals, all of whom used the same real estate sales office. The mortgages were brokered by Envision Lending Group or Gateway Mortgage Group. The loan originators who worked at these firms completed loan applications for the new unit owners with information that could not be verified by the Mortgage Fraud Task Force. That information included employment, occupancy status, income levels, sources of funds used for down payments and closing costs, and the appraised value of the units. In cases like these, where criminal violations are suspected, the MFTF refers its findings to the appropriate law enforcement agencies, at the local state or federal level.
“The FBI works closely with the Governor’s Mortgage Fraud Task Force in cases where criminal violations are alleged. The Bureau strongly supports the investigation and prosecution of individuals who are involved in mortgage fraud,” said John Diwik, Special Agent, Federal Bureau of Investigation.
Today’s actions will revoke the licenses of Envision Lending Group and Gateway Mortgage Group. One of Envision’s registered loan originators (L.O.), Arthur Pascu, will lose his L.O. license, as will Pawel Janowicz, a loan originator employed by Gateway Mortgage Group. Finally, IDFPR’s Division of Professional Regulation, which regulates residential real estate transactions, has filed formal complaints against Peter Petrovich, the appraiser involved in the scheme and LMB Properties, LLC for operating without the required professional license.
“Illinois consumers have the right to know that when they do business with companies licensed by our state, they will receive the best possible service by ethical and appropriately trained professionals,” said Dean Martinez, Secretary of the Illinois Department of Financial and Professional Regulation. “We will use all the tools available to us to discipline companies which violate of the laws and regulations designed to protect Illinois homebuyers.”
The Mortgage Fraud Task Force was created in 2006 to ensure that professionals and businesses involved in Illinois residential real estate transactions meet the standards for honesty, professionalism, and integrity required by Illinois statutes and regulations. Since the launch of the task force, more than 50 firms have been shut down and fines of more than $150,000 have been imposed on individuals and companies that were found to have violated the public’s trust.
Copies of the orders and complaints against Envision Lending Group, Gateway Mortgage Group, Arthur Pascu, Pawel Janowicz, Peter Petrovich and LMB Properties, LLC are available at www.idfpr.com.