Non-Profit Law Firm Extracts Unwitting Illinois Couple Out Of Sale Leaseback Foreclosure Rescue Mess; Effort Restores Homeowners' Equity, Foils Ripoff

In Round Lake Beach, Illinois, the Lake County News Sun reports:

• Denied refinancing from their bank and running out of money, a local couple was desperate to lower their mortgage payments. Concerned about providing for their four children and keeping their house, Kevin and Heather Funk turned to a mortgage broker for help. Unfortunately, the mortgage broker almost succeeded in evicting them from the house Kevin grew up in. Thanks to nonprofit law firm Prairie State Legal Services, the Funks were able to retain the deed to their house. "We are seeing more and more of these cases as people in trouble seek out a quick fix," said Larry Smith, managing attorney of the PSLS office in Waukegan.

***

• The Funks wanted to take advantage of low mortgage interest rates and refinance their 15-year mortgage to a 30-year plan. However, their bank denied their loan request because they had filed Chapter 7 bankruptcy. They selected a mortgage broker from the Yellow Pages, and he assured them that he could help. He kept the Funks waiting for several weeks while promising he would find a lender.

• "He had us backed into a corner and we were behind on our payment because he told us not to pay the bank. He came up with his plan to steal our home," Heather said. The lender, whose name was not released for legal reasons, suggested that his father purchase the home and the Funks could pay him back. They agreed to this. However, the lender's father was not making the loan payments, even though the Funks were paying him.

• They received a foreclosure notice, at which point "big time red flags and some bells and whistles" went off and the Funks contacted PSLS. The Funks came close to being evicted, but their mortgage and equity were restored, Smith said.

For the story, see Nonprofit firm battles mortgage fraud (Round Lake Beach family pulled back from brink).