Governor Blagojevich’s Mortgage Fraud Task Force takes action against Oak Brook Terrace Mortgage Broker

CHICAGO – Governor Rod R. Blagojevich today announced that his administration has revoked the license of Reeden Mortgage, LLC, for failing to maintain sufficient assets in the company and other violations of laws designed to protect borrowers.  The owner of the company, Raul Marrero was notified by certified mail earlier this week. 

 “In these risky times, the financial institutions we depend on for mortgage advice must be fiscally sound and managed appropriately,” said Governor Blagojevich.  “When we learn about bad business management and unsound practices, it is our job to close down the business before its customers can be hurt. That’s what we did this week with Reeden Mortgage.”

Early this year, Governor Blagojevich launched the Illinois Homeowner Assistance Initiative, which includes a $310 million Illinois Homeowner Assistance Pool to provide predictable, fixed-rate mortgages for Illinois borrowers with moderately good credit; established a statewide counseling network to help homeowners know their options; and made it easier for consumers to report fraudulent and deceptive practices.  He also asked the Mortgage Fraud Task Force (MFTF) to review mortgage lenders more often to make sure they continue to be financially healthy.
 
The MFTF, which is housed in the Illinois Department of Financial and Professional Regulation (IDFPR), did a complete examination of Reeden Mortgage, LLC last year and found numerous deficiencies in the firm’s operation, including a lack of assets necessary for it to remain financially sound, flaws in its loan application procedures, failure to comply with Truth in Lending Laws and a failure to properly maintain its customers’ records.  The company was placed under supervision in 2007 and has been closely monitored since then. 

In recent months, IDFPR learned that two of the businesses listed by the company as providing financial stability, Reeden Capital Group, Inc., and Multi Family Three, LLC, had filed for Chapter 11 bankruptcy protection on April 29, 2008, according to US Bankruptcy Court records.  In May, the companies had been ordered to stop selling securities by the Securities Department at the Secretary of State office.   In a statement, Secretary of State White’s office explained it issued the temporary order of prohibition after learning Marrero was issuing promissory notes to investors with claims of investing the funds in real estate ventures and paying investors high interest rates.

Customers of Reeden Mortgage, LLC or other lenders can call IDFPR at 877-793-3470 for information about their mortgages or to learn about options available to struggling homeowners.   Spanish-speaking investigators and consumer specialists are available to assist borrowers who do not speak English.

A copy of the order is available here.