The accusations that have piled up against Eliseo Carrillo run counter to the image the Chicago entrepreneur cultivated as a champion of Latino immigrants.
As the housing market weakened in recent years, Carrillo's smiling face appeared on billboards throughout the city's Mexican-American neighborhoods. Spanish-language TV commercials featuring Mexican music and Carrillo wearing a stylish cowboy hat promised that his real estate companies — all using the name "Protecta" — were friends and guardians of immigrants in need.
But after signing what they believed were loan papers to save their homes from foreclosure, at least four of his struggling clients have filed lawsuits alleging that they were misled into surrendering the deeds to their homes in complex "mortgage rescue" schemes they didn't understand.
Some of the properties still face the risk of foreclosure after third-party investors recruited by Carrillo's company failed to make mortgage payments on the homes, according to the lawsuits. Two of those investors, each named as a co-defendant in at least one suit, also are facing financial problems, according to court documents.
Meanwhile, Carrillo and his companies walked away with tens of thousands of dollars in broker fees, closing costs and other forms of compensation — in one case, more than $86,000, according to the suits.
The mortgage lawsuits depict Carrillo, 36, as a "scam" operator, savvy in the arcane laws governing real estate transactions, who saw profit in the thousands of troubled home mortgages taken out by immigrants less likely to understand the complicated English-language legal documents and less prone to speak out if something went awry.
A few of the clients were in the country illegally, making them even more vulnerable, according to attorneys and community activists.
"There was a lot of preying on the immigrant community, with the feeling of patriotism, camaraderie and family and all of these things," said Rey Lopez-Calderon, a South Side community organizer familiar with Protecta's transactions. "If you've looked at his commercials, he really overdoes it. He's got this big cowboy hat on. He's got the thick Mexican accent. He's really: `I am super Mexican guy, and I'm out there helping the community.'"
Protecta, which Carrillo has shut down, and two other companies he directs — My Loan Negotiator and Cairo Holdings — are being investigated by the Illinois attorney general's consumer fraud division. A spokeswoman for the attorney general confirmed the probe of Carrillo's companies but declined to discuss specifics.
Carrillo and his companies also have been targeted by at least a dozen lawsuits since 2006, including the four filed by clients regarding Protecta schemes in which third parties "lent" their credit to distressed homeowners by assuming ownership and taking out a new mortgage in exchange for a profit, with the original homeowner paying rent to cover that second mortgage.
Most of the other lawsuits were filed by banks, including one that sued Carrillo last year for failing to repay $2 million in loans and which last week disputed his claim to have once worked there.
Agreeing to answer questions only via e-mail and
, Carrillo defended the business practices called into question by the suits and state investigation, adding that he is cooperating with the attorney general's inquiries. He contends that everything was legal and that his clients were aware of what they were getting into.
He said the lawsuits represent "less than half of a percent of all transactions we were ever involved in," and that many of the loan deals were handled by others under him.
Carrillo, who according to public records once owned a 1999 Bentley sedan, said he is now insolvent. He said he is out of the financial business and studying to get into law school. He called the attorney general's investigation politically driven — the latest in a chain of what he alleges is government harassment over the years that has led to multiple audits and a brief cancellation of his broker's license.
"I learned my lesson, when government messes with you, even though it's power abuse, just let it happen," he wrote. "NO ONE will come to the rescue."
The state probe is not the first time Carrillo has been eyed by state regulators. In 2007, the state fined Protecta $30,000 for allowing unlicensed brokers to initiate more than 200 mortgage loans. In an interview with the Tribune then, Carrillo claimed the investigation was retaliation because he had contributed $8,200 to a 2006 election challenge to state Sen. Martin Sandoval, D-Chicago.
Describing himself in community newspaper profiles as a son of Mexican immigrants who pulled himself up from a modest life in Little Village, Carrillo is a former Bogan High School class president and
graduate who acquaintances say is charismatic yet down to earth. He boasts on an online resume of a consulting stint at the PricewaterhouseCoopers accounting firm and a two-year stint as a community bank director.
However, the bank where he said he oversaw 70 loan officers — National Republic Bank of Chicago — is among those that have sued him. Moreover, two top officials from the bank told the Tribune that Carrillo was never an employee.
"No, no, he didn't work here," said the bank's chairman, Hiren Patel. Patel said he knew Carrillo only as a customer who failed to pay $2 million in construction loans for 10 properties until the bank sued him last year. Many of those properties are now vandalized neighborhood eyesores, according to yet another lawsuit.
"He wanted to do some mortgage business, but we didn't go for it," Patel added.
Amador Ocampo, a U.S. citizen, says he initially saw Carrillo as a fellow Mexican eager to help him save his home and erase about $24,000 in debts. Instead, in what he believed was a refinancing transaction, Ocampo says he and his wife unwittingly signed over their $300,000 house in Little Village to a Carrillo-recruited investor, whom they had never met.
They also signed a $45,000 promissory note payable to Carrillo, which they thought was an estimate for Carrillo's services, Ocampo alleges in a 2007 lawsuit pending against Carrillo. After the earlier $24,000 debt was paid off with that loan, Ocampo was to have paid the difference — at an annual percentage rate of 87 percent, the Ocampo lawsuit alleges.
"When we showed the papers to a pastor we know at the Salvation Army, he told us that we were no longer owners of the house, that we were now renting it," recalled Ocampo, 39, who says in the lawsuit that he relied on Protecta employees to interpret the English documents.
"He told me that he would help me because we were
," Ocampo said in Spanish, using the word for compatriot.
Ocampo is seeking in Cook County Circuit Court to reclaim ownership of the house, which he and his family still occupy. The lawsuit says they paid about $8,600 in "rent" checks through Protecta but stopped paying after discovering the real meaning of the transactions.
Responding in a court filing, Carrillo calls Ocampo's claims "ridiculous," adding that Ocampo "would be on the street" if not for Protecta's aid. Carrillo argues that Ocampo has been living there for free, contending that the investor, who is the new owner, paid $32,600 in mortgage payments.
Nobody is paying the mortgage now, but the lawsuit so far has prevented foreclosure proceedings. Carrillo says he has not received payment on the 87 percent loan.
In a federal suit, Rafaela Moreno claimed she was steered by Carrillo into signing over the deed to her house in a $10 quit-claim transaction after he allegedly promised to fix her credit. A new loan taken out by an investor on the house paid off her $120,000 mortgage balance. It also earned Carrillo a bank check for $86,320.
The next year, Moreno was allowed to repurchase the home, but for $250,000 — more than twice what she owed on the first mortgage, according to court documents.
In a 2008 settlement of Moreno's lawsuit, Carrillo agreed to pay Moreno $62,500 in compensation for her losses. He paid nearly half that amount but stopped payments late last year, court documents show.
Yet another lawsuit, filed last year by Carmen Macias, tells a similar tale, accusing Protecta and its agents of "stealing" her Southwest Side home after she thought she was refinancing her mortgage in 2006. Instead, the suit claims, the deed was transferred to an investor. Protecta earned $1,800 in fees, while another real estate company with whom Carrillo had had a partnership received $38,000, according to closing documents.
"Mortgage rescue plans" are not uncommon — and legal when properly executed. But after widespread abuse over the years, they have led to the passage of anti-fraud laws across the country.
A 2007 Illinois law requires "mortgage rescuers" to provide distressed homeowners with a written contract that makes it clear their house is being sold. The law also allows homeowners five days to cancel the sales contract.
That law and the lethargic housing market have curtailed such rescue activity. But the practice has been kept alive by job losses and balloon payments that last year fueled 23,200 home foreclosures in Chicago, attorneys say.
According to the attorney general's office, cases of mortgage fraud jumped at the end of the last decade. Since 2005, the state has brought charges in 44 cases of mortgage fraud, said spokeswoman Natalie Bauer. But Carrillo has not been charged.
Lea Weems, an attorney with the Legal Assistance Foundation of Metropolitan Chicago, which represents Ocampo, said her nonprofit organization has been looking into nearly 70 cases of alleged mortgage rescue fraud involving a variety of operations. Referring to Protecta, she added: "This one is particularly egregious."
Two Protecta investors interviewed by the Tribune described the "sale leaseback" programs Carrillo pitched to help immigrants in financial trouble.
In the arrangement, the investors expected to collect monthly payments from the original homeowners. But in the Ocampo and Moreno cases, the rent payments went to Protecta, their lawsuits say. Carrillo confirmed that Protecta did handle the rent payments but said it was merely to help document them.
One investor, who spoke on the condition of anonymity because he's in the country illegally, was a maintenance man who wound up owning four houses besides his own, according to closing documents naming Protecta as the broker. Though the man said he initially profited about $20,000, all four of the houses now are in foreclosure proceedings.
In loan documents recorded by a Protecta agent, the man's monthly income was reported to be $7,200 — more than twice the $3,400 per month his pay stubs at the time say he earned — which made it easier for him to qualify for the loans.
"If he would have explained this is how it would happen, we would never have done it," said the investor, who is named as a defendant in one case. "I never wanted to cause pain to those families, nor mine."
The second investor, Sergio Villegas, received a profit of $12,438 in one Protecta-arranged transaction, according to court documents. Several properties under his name now are in foreclosure proceedings or were taken over by a bank.
"My credit is ruined," Villegas said. "All of this has been very bad."