• 41 percent drop in mortgage fraud cases

    According to LexisNexis Mortgage Asset Research Institute, reported mortgage fraud incidents fell 41 percent between 2009 and 2010.  The news marks the first reduction in several years, according to the report.

    The report suggests that tightened standards are making it tougher for perpetrators to commit fraud.

    Even with the reduction, the Treasury Department estimates that fraud still accounts for more than $1.5 billion in annual losses to the real estate market. The Mortgage Asset Research Institute’s report believes the losses to be much higher than the Treasury’s estimate.

    “The industry is plagued with vulnerabilities within the origination process that expose lenders to risk,” according to the Institute.

    Florida tops the list with the largest amount of mortgage fraud-it has done so for the last five years.

    Illinois and Michigan were the only two states in the Top 10 of the list that actually demonstrated declines.  According to many Chicago bankruptcy and foreclosure attorneys , the biggest source of fraud involves the mortgage application, where borrowers misrepresent their financial situation or their identity. The second most common area of fraud is in the appraisal or valuation of the property itself.  Short sales and foreclosure follow in droves.

  • With skyrocketing debt, Chicago hotel files bankruptcy

    Another Chicago based hotel has filed for bankruptcy protection.  Yet despite the unfortunate but all too common news, the owners of the property stand committed to remain open and conduct normal business during the tedious process.

    ALT Hotel LLC, the owners of the once profitable hotel, claims to have approximately 100 to 200 creditors. The debt of the venture is staggering which is expected to have reached approximately $50 million to $100 million. The debt equals or exceeds the new worth of the parent company which has assets ranging from $100 million to $500 million.  In these times, many Chicago bankruptcy attorneys are used to seeing debt exceed assets.

    Though once certain the hotel would avoid bankruptcy, the owners now argue that the bold actions of single creditor has threatened the hotel’s future, causing no the owners no choice but to file. The list of creditors is extensive and includes Wells Fargo, Diamond Rock Hospitality, and Diamond Rock Allerton Owner LLC.  The hotel owners expect these debtors to file lawsuits.

    A spokesperson for the hotel claims the hotel will emerge stronger then ever.

    “We are very proud of the significant improvements in hotel operations and performance in the few months since we assumed ownership.  We have met all our obligations, and enjoy strong positive cash flows.”

    The list of secured creditors was not cited in the bankruptcy filing.