By Peter Ricci
Chicago mortgage company Guaranteed Rate has filed a lawsuit against developer Warren Barr for a multi-million dollar mortgage fraud.
The lawsuit, according to a Crain’s report, alleges that in late 2007, Barr and others responsible for the Vision on State development recruited “straw buyers” to purchase several of the building’s 253 units at inflated prices, in order to cover the numerous costs associated with the flailing development, including a $56 million construction loan.
Other details include:
- Guaranteed Rate filed a similar complaint in the Cook County Circuit Court last year, but it voluntarily dropped it after the judge dismissed nearly half of the counts.
- The complaint alleges damages of more than $600,000 on three loans totaling $1.2 million, loans that were allegedly made to those straw buyers on false information and appraisals.
- Twenty-five other defendants are also named in the lawsuit for having a role in the scheme, including Asif Aslam, owner of Aslam Group Inc.
The Crain’s article does point out some pricing irregularities involving the loans in question. Though most buyers of Vision on State units paid between $300 and $400 per square foot in 2007, those costs increased to $500–$600 in the first part of 2008, which is the time that Guaranteed Rate issued its loans.