In a press memorandum first released by our News Affiliate WICS NewsChannel 20, Attorney General Lisa Madigan – in partnership with the Illinois Department of Financial and Professional Regulation (IDFPR) – today announced an agreement with Diamond Residential Mortgage Corporation under which the company will pay $1.2 million to eligible consumers who were defrauded by one of the company’s branch managers.
Madigan entered an assurance of voluntary compliance settlement with the residential mortgage company based in Lake Forest, Ill. The agreement resolves an investigation by Madigan’s office and IDFPR into alleged mortgage fraud at Diamond’s Springfield branch.
Diamond cooperated with Madigan’s office and IDFPR during the investigation into allegations that former Jacksonville resident and Springfield branch manager Chris Schaller defrauded individuals seeking mortgage loans. In some cases, borrowers believed they were obtaining a mortgage when Schaller actually placed them into a different type of transaction, a contract for deed, which can be financially riskier for borrowers than a traditional mortgage.
Additionally, in some instances, consumers did not receive signed copies of their agreements with Schaller. In other instances, IDFPR found evidence that Schaller engaged in fraudulent loan origination activities. Madigan’s office is conducting a separate investigation of Chris Schaller, which is ongoing.
Under the settlement, Diamond agrees to pay $1.2 million that Madigan’s office will distribute to consumers defrauded by Schaller. Madigan’s office and IDFPR will work together to conduct a claims process for consumers who were aggrieved by Schaller’s practices to request compensation from a fund that will be managed by Madigan’s office. Consumers who wish to be considered for compensation from the $1.2 million fund should file a complaint with Madigan’s Consumer Fraud Bureau in Springfield. Complaint forms are available on Madigan’s website or by calling her Consumer Fraud Hotline at 1-800-243-0618.