A Cook County judge on Wednesday ordered businessman Mark Diamond to stop performing mortgage-related services and home repair in Illinois, where he has been accused of scamming elderly black homeowners on the city’s West and South Sides.
“That is some great news for people like my aunt who was a victim and the other 100 or so people he victimized,” said the Rev. Robin Hood, founder of the Illinois Anti-Foreclosure Coalition. “We’re glad of the outcome, but how do you send a message to the other Mark Diamonds?”
Diamond has been the subject of mortgage-related lawsuits for decades.
An uptick in the number of complaints against him last year prompted Illinois Attorney General Lisa Madigan to file an injunction in October to stop Diamond from doing business while a 2009 lawsuit she filed on behalf of dozens of his alleged victims moves through federal court. The lawsuit alleged that Diamond and five other home repair and mortgage companies scammed black homeowners in the area, stripping nearly $1.3 million in equity from the homes of at least 36 people.
The FBI raided Diamond’s Logan Square offices in March.
The Illinois Department of Financial and Professional Regulation fined Diamond $25,000 in 2010 and revoked his mortgage broker’s license for four years. His activities have been cited in U.S. Senate testimony about subprime lending and featured in local and national exposes about mortgage fraud.
“The federal government should overturn every reverse mortgage he did,” Hood said Wednesday.
Dennis Both, Diamond’s lawyer, could not be reached for comment about the judge’s order.
The scheme by Diamond and his company, United Construction of America, allegedly centered on reverse mortgages, a financial tool that lets senior citizens convert part of their home’s value into cash in the form of a loan that doesn’t have to be paid back until the person dies or moves out. If family members want to keep the property, they have to pay off the loan.
Diamond and employees allegedly persuaded their victims to use the mortgages to pay for home repairs — but often took the money while providing substandard or no repairs.
“Promising to provide competent home repairs and subsequently providing repairs with shoddy workmanship is an unfair or deceptive practice under the Consumer Fraud Act,” said the injunction issued by Judge David B. Atkins.
State Sen. Patricia Van Pelt (D-5) held a hearing earlier this year in Chicago, at which time 115 victims of reverse mortgage scams had been identified. Van Pelt decided to hold the hearing after reading the Reporter story.
“It sounded the alarm,” she said.
Both the Illinois House and Senate passed legislation aimed at reverse mortgage scams last month. The bill, which was introduced by State Sen. Jacqueline Collins (D-16), awaits the governor’s signature before becoming law.
Subuk Hasnain contributed reporting to this story.