Blagojevich Administration cracks down
on suburban real estate fraud scheme

CHICAGO – Governor Rod R. Blagojevich today announced that officials from the Illinois Department of Financial and Professional Regulation (IDFPR) have shut down a suburban real estate fraud ring.  One Renaissance Place in Palatine was the target of a real estate ‘flipping’ scheme involving 13 units in high-rise building.  Of the units under investigation, nine are currently in foreclosure.  One individual, Radostina Todorova, acting as real estate broker and engaged at times in loan originator practices, was at the center of the scheme. The case has been referred by IDFPR to federal authorities. 

Much like the flipping scheme uncovered by the State last May, the units in question were bought and sold multiple times, often at highly inflated prices.   The average 2-bedroom unit in the complex sells for about $250,000.  The suspect units sold by Todorova averaged $350,000.  Additionally, the new owners never moved into some of the units, no assessments were paid and in some cases, only a few months later the building was notified that the units were in foreclosure.

“In a housing market as unsettled as this one, mortgage fraud is an even greater threat to homebuyers and homeowners. We are not going to allow fraud to reduce the value of people’s homes.  The Mortgage Fraud Task Force will continue making sure that the prices of homes across the state are not distorted by fraud, and going after individuals and groups involved in unlawful schemes,” said Gov. Blagojevich.

The fraud ring was uncovered when the property manager at One Renaissance Place filed a complaint with the Mortgage Fraud Task Force in May.  She called IDFPR after seeing news stories about the mortgage flipping scheme the task force had halted in a south Chicago neighborhood.

“These schemes hurt the very consumers this Administration is trying to protect.  It takes time to find all the parties involved but even in the most complicated transactions, we’ve been able to stop these people from tampering with the value of peoples’ homes,” said Dean Martinez, Secretary, IDFPR.

Each transaction involves several IDFPR licensed professionals.  Todorova acted as the real estate agent and also served as the loan originator for some of the nine units in the building that are in foreclosure.  In one loan package, the information reported about the buyer’s income was grossly inflated monthly income of $9,800 rather than the $1,406 IDFPR was able to verify.  The loan documents reviewed by IDFPR also show that the buyer attested to having two separate units listed as the primary residence. Todorova’s real estate and loan originator licenses have been revoked.  

Todorova worked as a loan originator for Charter Funding.  In addition to the problems with the loan paperwork, IDFPR’s investigation found that Charter did not supervise Todorova’s work and allowed her to work as a loan originator before her registration had been approved.  Charter has been fined $10,000 in this matter. 

Working with Todorova was another loan originator, Brian Angarone.  He has been suspended for 60 days and fined $5,000 for filing the loan documents prepared by Todorova without verifying that the information was accurate. 

Angarone worked for NewCastle Home Loans, LLC, in Chicago.  NewCastle has been fined $10,000 for failing to supervise its staff and for allowing a loan with questionable information to be processed.  
 
A six count Formal Complaint has been filed against two appraisers, Michele Beymer and Paul Adams.  The Formal Complaint alleges that Beymer prepared appraisal reports that provided for inflated values on two condominium units.  For example, in one appraisal report, Beymer noted that the unit had been sold for $250,000.00 on 3/7/07, but Beymer did not explain why the unit was worth $95,000.00 more ($345,000.00) only two months later.  The Formal Complaint alleges that Adams failed in his responsibilities as Beymer’s supervisor for the two appraisal reports, and further alleges that Adams failed to cooperate with the investigation.  A Preliminary Hearing on the case is scheduled for October 29, 2007.

Subpoenas have been issued to a title agency and other parties involved in the transactions, requiring them to produce financial records and other documents related to the closings.

Individuals and companies named in the orders and complaints announced today have the right to a hearing. They include:

Radostina Todorova, Loan Originator and Real Estate Agent
Brian Angarone, Loan Originator
Michele Beymer, Appraiser
Paul Adams, Appraiser
First Magnus Financial d/b/a Charter Funding
NewCastle Home Loans

Click on the links in above to view the orders.
Note there are two separate orders and links for Radostina Todorova.