- Overview of case: Lessie Towns, 75, was consistently making monthly mortgage payments on a bungalow that she has called home on Chicago’s South Side since the 1960s. In April 2008, Mrs. Towns learned that her home was one week away from foreclosure.
- Investigative techniques: The Mortgage Fraud Task Force is comprised of investigators and attorneys representing IDFPR’s licensing and regulatory divisions. The MFTF spent more than 600 hours investigating licensees, combing through over 4,000 pages of mortgage documents and interviewing more than 30 individuals connected to the case, all in an effort to uncover potential crimes, discipline licensed professionals, and refer cases to state and federal law enforcement agencies for further legal action. The investigative and legal team behind “Avenue of Broken Dreams” brought real-world knowledge to the case. Many had professional experience in the real estate, appraisal, and mortgage industries prior to serving in state government. These attributes proved to be essential in uncovering the complex layers of the fraud scheme.
- Detail of how the case is exceptional, going beyond what is normally expected or required: The MFTF was formed in 2006 specifically to investigate complex, multi-layered transactions and to place a “victim’s eye” perspective on mortgage fraud. Prior to the MFTF’s creation, no state regulatory body investigated fraud schemes as a whole; rather, each agency focused on a specific aspect of a real estate transaction, which was both inefficient and ineffective in stopping fraud rings with multiple tentacles. Now, under the unified MFTF, results are more comprehensive, timely, and impactful, which increases the chance of helping the victims of fraud and sends a stronger message to would-be perpetrators of fraud. The Towns’ case exemplifies the effectiveness of a comprehensive investigatory model: a new law was passed, multiple bad actors were stopped, and the home of an established community member was saved.
- Action resulting from investigation: Over a two-day period, IDFPR issued revocation orders against three loan originators, one mortgage brokerage corporation, and one mortgage broker; disciplined one individual for unlicensed loan origination; and filed formal disciplinary complaints against one real estate corporation, one real estate salesperson, and one real estate appraiser.
- Effects and results: In summer 2009 in Mrs. Towns’ backyard, Illinois Governor Pat Quinn signed the “Lessie Towns Act,” which provides increased oversight of residential mortgage companies and mortgage loan originators. Although the fate of Mrs. Towns’ home hung in the balance for almost two years, with the MFTF’s assistance, she recovered the title to her home and the ringleader earned a lifetime ban from the mortgage industry.