Illinois AG cracks down on mortgage fraud

Illinois Attorney General Lisa Madigan is suing four Chicago-area companies and attorneys for operating fraudulent mortgage and loan modification schemes.

Madigan's office said she filed the lawsuits Tuesday as part of a multi-agency crackdown. The companies and attorneys are accused of illegally charging customers up to hundreds of thousands of dollars and then not doing any work for the homeowners. The homeowners were seeking to keep their properties and avoid foreclosures.

Madigan says consumers should know similar companies "are run by con artists who have started to use attorneys as sham fronts." She said they are "scamming families out of thousands of dollars and actually making foreclosure more likely."

The attorney general says the companies are illegally using a provision in the 2006 Mortgage Rescue Fraud Act to scam homeowners.