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International Mortgage Solutions charged with mortgage fraud

June 20, 2008

International Mortgage Solutions charged with mortgage fraud

For Immediate Release: June 20, 2008

Company forged signatures on loan documents, failed to disclose owner's drug crimes.

(St. Paul, MN) - The Minnesota Department of Commerce announced today it has taken action against International Mortgage Solutions (IMS) of Minneapolis and its owner, Sylvester Luellen for multiple counts of mortgage fraud and for failing to reveal Luellen's criminal history. The Department issued a 13 count statement of charges and ordered Luellen to appear at a hearing on July 24, 2008.

The Department alleges that International Mortgage Solutions either failed to acquire signatures or forged signatures on multiple loan related documents for ten different clients. The company also failed to disclose their affiliated business arrangement with Abstractos Titulos & Closing (ACT), a licensed title insurance company, in violation of the Real Estate Settlement Procedures Act (RESPA). Luellen was also an owner of ACT.

In addition to forging signatures, in at least one case, IMS provided false information on a loan application, overstating Minneapolis resident Terry Collins' income by more than $11,000 a month. Within six months, Collins discovered he could not afford the payments and had to sell the property at a substantial loss.

IMS also failed to inform the Department of Luellen's prior criminal history when it applied for a mortgage origination license in 2003. Luellen pleaded guilty to Felony Second Degree Possession Controlled Substance in February of 1997 and served 21 days in the Hennepin County Adult Corrections Facility. He also pleaded guilty to Misdemeanor Disorderly Conduct in Dakota County in August of 2002.

In July of 2007, Luellen pleaded guilty to Fifth Degree Possession Controlled Substance and again failed to notify the Department of the criminal complaint or guilty plea, a violation of state law.

The company has been ordered to appear at hearing on July 24, 2008 and could face disciplinary action and sanctions including debarment, revocation or suspension of their license and civil penalties.