State cites fraud in shutting title companies State regulators said Friday they shut down a mortgage fraud scheme that might have cheated Chicago area residents out of title to their homes. Officials said the fraud involved a loan originator from the South Side, a mortgage broker with a downtown office and seven interconnected title insurance companies based in Palatine. They said the scheme was so complex that they're still trying to sort out how many homeowners might be affected.
Chicago Sun-Times
State cites fraud in shutting title companies August 5, 2006 BY DAVID ROEDER
Business Reporter State regulators said Friday they shut down a mortgage fraud scheme that might have cheated Chicago area residents out of title to their homes.
Officials said the fraud involved a loan originator from the South Side, a mortgage broker with a downtown office and seven interconnected title insurance companies based in Palatine. They said the scheme was so complex that they're still trying to sort out how many homeowners might be affected.
The Department of Financial and Professional Regulation said up to $1.5 million in loans arranged by Charles White Jr. was diverted to a real estate management company he controls. White allegedly worked through Mutual Trust Funding Corp. to find buyers of homes whose owners were near foreclosure.
White had the owners sell their homes for a fraction of their market value, using a contract that let them repurchase their homes if their financial condition improved, officials said. In the meantime, they could remain in the houses and pay rent, they said.
Reynold Benjamin, an assistant director at the state agency, said White then altered documents to ensure that the mortgage cash and rentals were funneled to his company, called Eyes Have Not Seen. White never paid money owed to the previous lender or to the homeowner, Benjamin said.
White, of the 400 block of West 87th, has had his license as a loan originator suspended. The state agency issued an emergency order revoking the license of Mutual Trust, based at 120 W. Madison.
It also revoked the licenses of seven title agencies it said were conspirators in the scheme. Using such names as All American Title Agency and Palatine Title Agency, the businesses are owned by Christy and Patricia Jepson.
The state said one of the title firms, Title Zone, has a 30 percent ownership interest in the name of White's grandmother, Elnora White. The companies were closed as of Monday, officials said.
White and the Jepsons could not be reached. No one answered at the telephone listing for Eyes Have Not Seen, with a location at 800 S. Wells.
Benjamin said his agency's investigation could lead to criminal charges. Homeowners who might be involved should contact the department at (217) 558-7009.
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