State sues Woodridge mortgage company over deceptive marketing

Attorney General Lisa Madigan filed lawsuits against two mortgage brokers, accusing them of using unfair and deceptive marketing practices to solicit seniors for reverse mortgages.

The suit was filed Monday against Woodridge-based Hartland Mortgage Centers Inc. and American Advisors Group in Irvine, Calif.

In each of the lawsuits, Madigan alleges that the defendants targeted seniors to take out home equity conversion mortgages, known as reverse mortgages, that allow homeowners who are 62 and older to borrow money against the equity in their homes.

"These companies used extremely misleading language in their advertising, sometimes even disguising their loans as government benefits that borrowers don't have to repay," Madigan said in a release.

Many consumers reported they didn't even know the offers were for reverse mortgages or a loan of any kind, she said. "That is unacceptable," Madigan added.

Reverse mortgages include strict terms and conditions that require the borrower to repay the loan when certain conditions are met.

The suits also claim that the defendants' marketing gave consumers the false impression that they would maintain ownership of their property. In reality, consumers who take out reverse mortgages can lose their property to foreclosure if they fail to meet the conditions and terms of the loan, including paying property taxes and properly maintaining the home.

These were the first two suits the office filed related to reverse mortgages, said spokeswoman Natalie Bauer.

"Given the economic downturn, mortgage rescue fraud is one of the highest areas were're targeting," Bauer added.

Hartland Mortgage Centers did not return calls to comment on the lawsuit.