Consumer protection fund reimburses residents after Chicago-based company fails to pay escrow obligations
CHICAGO, IL – November 18, 2009 – (RealEstateRama) — Thirty-four Illinois homeowners were made whole this month when the Illinois Department of Financial and Professional Regulation (IDFPR) repaid all the money lost from their escrow funds earlier this year. The homeowners were in default for taxes and insurance coverage after Chicago-based American Escrow, LLC went out of business without making the obligatory property tax and insurance payments from their escrow accounts.
Checks with a combined total of $77,912.73 were mailed during the past few weeks to homeowners throughout Illinois, some of whom were in danger of losing their homes due to unpaid property taxes. American Escrow was in the business of collecting property tax and insurance payments for homeowners whose lenders did not offer escrow services. After the company failed to make payments, IDFPR tapped its Transmitters of Money Act (TOMA) Consumer Protection Fund to help Illinois customers—who were among thousands nationwide—that were hurt by the company’s failure.
“It was like a hit in the gut when I got a letter from Cook County that my home was up for sale due to back taxes,” said Maizelle Archie of south suburban Flossmoor, who stayed in close contact with IDFPR and Attorney General Lisa Madigan’s office during the ordeal. “But, I breathed a sigh of relief when we received a check for full amount of the outstanding property taxes.”
“It is rewarding to be able to use this fund in the way it was intended. Homeowners in Illinois should know that the Department works for them and that we will do everything in our power to protect them from harm,” said Brent E. Adams, Secretary of IDFPR.
IDFPR last summer cited American Escrow and its owners, Derek Lurie and his father, Steven Lurie, the unlicensed practice of transmitting funds electronically. At the same time, Illinois Attorney
General Lisa Madigan filed a lawsuit alleging that American Escrow violated the State’s Consumer Fraud and Deceptive Business Practices Act when the company unexpectedly closed in March 2009.
IDFPR expects to pay an additional $27,000 in the coming weeks. Each claim was handled on a first-come, first served basis.
IDFPR’s action also demanded that American Escrow make a payment to the TOMA fund at four times the amount of money for all transactions conducted by the company during the time in which it operated without the required license.
American Escrow victims can access the TOMA Consumer Protection claim form at http://www.idfpr.com/dfi/default2.asp