Foreclosure Fraud Alleged In Chicago

420 West Grand Avenue and 951 East Hyde Park Boulevard (River North Condos, Apartments)

420 West Grand Avenue and 951 East Hyde Park Boulevard (River North Condos, Apartments)

A convicted Chicago real estate scammer’s former lawyer wants to hold onto condos he received from the client as payment in 2007, and is suing the banks trying to foreclose on them, claiming they are doing so fraudulently.

Rufus Cook, the former lawyer, and Robert Anthony Bryant, previously a client of Cook’s who served prison time in a scheme involving tax-delinquent real estate, filed a lawsuit late last month in Illinois federal court naming HSBC Bank, Bank of America, Citi, a Cook County judge and a slew of lawyers for the banks as defendants.

Cook claims the defendants have no right to foreclose on his properties because they failed to keep adequate mortgage records. He says he’s getting robbed of due process in foreclosure proceedings that are still pending after 10 years of legal back-and-forth, and wants $2 million to cover damages he’s suffered, including attorneys’ fees, and to “punish defendants and deter such future violations,” according to court documents.

“What this case is about is, among other things, the fraud the banks independently began committing in 2011 and 2012 when each fraudulently claimed to own a property it didn’t own,” Cook said in an email.

Each of the defendant banks either declined to comment or did not respond to requests for comment.

Cook’s interest in the Chicago properties at the center of the federal lawsuit — condos at 951 East Hyde Park Boulevard and 420 West Grand Avenue, which also includes ground-floor commercial space — stems in part from his representation of Bryant. The former client was imprisoned from 2011 to 2015 after a federal judge found he defrauded more than 40 victims in a $1.4 million plot selling worthless documents pertaining to tax-delinquent real estate auctioned by Cook County, according to the Chicago Tribune. Bryant’s investors were unable to take titles with the papers and he rarely issued them refunds, prosecutors said at the time.

Cook was told by federal officials he was being investigated as part of the scheme, too. Although there is no record of him being charged, Cook was disciplined in 2013 for representing both buyers and the seller in a transaction in which he had a personal interest, according to the Illinois State Bar Association.

Bank of America is attempting to foreclose on one of the properties — which is listed for sale for $1.95 million by broker John Munson, who said he represents a trustee on a loan tied to the property and received offers but none at the price needed over the more than yearlong period it’s been marketed.

“There is interest in this property, just not at the number they need,” Munson said.

An auction was held for the property Feb. 25 and it fetched a $1.8 million bid, according to records of the Judicial Sales Corporation, which conducts most foreclosures sales in Cook County. Cook’s suit seeks to prevent a closing.

Bank of America has indicated it holds claim to the property after a mortgage originally made to Bryant was transferred to the bank by another lender. Cook claims that Citi never had ownership of the mortgage and couldn’t have transferred it to Bank of America.

Cook’s other property, a Hyde Park condo and commercial space, is being foreclosed on by HSBC, which he says is unable to prove it acquired the mortgage from the original lender on the property.

In 2011, four years after the original lender’s bankruptcy, HSBC claimed to own the property records and sued Cook. The property is set for a sale March 30, according to the lawsuit, which claims that HSBC “still after over 14 years, [has] never having produced the negotiated note or a valid mortgage.”

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