Illinois Department of Financial and Professional Regulation

 

NEWS
   
For Immediate Release:
July 19, 2010
 

Mortgage Fraud Task Force Investigation Leads to
License Revocation

 

Tamayo Financial fined $100,000 for offering predatory mortgages

 

CHICAGO – The Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking has issued an order revoking the license of Tamayo Financial Services, Inc. (TFSI) and assessed a $100,000 fine. An investigation conducted by the Department’s Mortgage Fraud Task Force found multiple violations of the Residential Mortgage License Act, including those leading to exceptionally high rates of defaults and foreclosures.  TFSI had a 12.66% Default and Claim rate on FHA loans, which is nearly three times the national rate for Housing and Urban Development loans.

“Tamayo clearly failed to provide its customers the consumer protections required by Illinois law,” said Jorge Solis, Director, Division of Banking, IDFPR.  “Not only did Tamayo issue loans irresponsibly, it ignored or skirted the efforts of state regulators to monitor its business.”

Some of TFSI’s business practices caused many families to lose their homes to foreclosure.  In a recent examination of 30 loan files, IDFPR found that TFSI permitted at least 14 borrowers to sign disclosure documents which were blank. These documents are specifically designed to inform borrowers, in language they can understand, of critical loan agreement terms and compare terms of the borrower’s loan with other mortgage loans which may be less expensive.     

In the same examination, IDFPR found that eight borrowers were provided mortgage loans when they already owed lenders more than half of their incomes, before signing for the new mortgage.  In one case, TFSI issued a new mortgage to a borrower that already had financial commitments of 96% of his income.  Illinois law requires lenders to consider whether a potential borrower earns enough to pay his or her existing debt and to deny mortgages that borrowers cannot reasonably pay back. The company failed to meet that responsibility.

The Illinois Mortgage Fraud Task Force was recently awarded the 2010 Council on Licensure, Enforcement and Regulation (CLEAR) Investigative Excellence Award.  The Task Force, which is comprised of investigators, managers, and attorneys representing each of IDFPR’s three divisions, has the authority to examine every aspect of a residential real estate transaction, from listing of a property for sale to the closing of the purchase and sale transaction. 

A copy of the Order is posted here.