Dee McConnell’s family lost their longtime Austin home after her mother, Mae Ella Dunn, fell victim to a reverse mortgage scam. Dunn, who worked for years to buy the house and moved her family from Cabrini-Green public housing in 1995, was convinced by contractor Mark Diamond to sign paperwork that ultimately put her property at risk.
McConnell said her mother, suffering from dementia at the time, did not realize the documents she signed would add debt through a reverse mortgage. “She was so just enamored with Mark Diamond,” McConnell recalled. “He was the epitome of a con man, so it was hard to tell her anything at that point.” The resulting debt forced McConnell to sell the house after Dunn’s death.
“There’s no legacy passed down by my mom,” McConnell said.
Dunn is among more than 100 homeowners targeted by Diamond, who pleaded guilty to wire fraud in January 2025. He received over 17 years in federal prison and was ordered to pay $2.7 million in restitution. Several associates were also sentenced last year.
Many victims are still trying to regain control of their properties but face legal obstacles. Attorneys Juliet Sorensen and J. Samuel Tenenbaum represent 45 clients arguing that the mortgages are fraudulent because homeowners were deceived into signing them. Reverse mortgages allow older homeowners to borrow against home equity but can lead to foreclosure if conditions are not met.
“They were defrauded into applying for that reverse mortgage, [so] you would think it would be a no-brainer that the mortgage would therefore be void,” said Sorensen, clinical professor of law at Loyola University Chicago’s law school. “That has been challenging, more challenging than your common sense would tell you to expect in the courts.”
Sorensen noted families are divided on how best to proceed: “There are some folks who are heartsick, ready to move on and open to a settlement, whatever that might be,” she said. “There are other folks who want to litigate and fight against the judgment of foreclosure, and understandably so.”
The legal team has achieved some successes; in one case involving a planned foreclosure sale by the U.S. Department of Housing and Urban Development (HUD), advocacy led HUD in December to pause proceedings while reviewing options for the affected homeowner.
“These cases are so complicated that it takes a village to undo the damage that this fraud has caused,” Sorensen wrote later by email. With HUD’s decision, one client’s family was “truly home for the holidays.”
Diamond’s scheme focused on seniors—often Black homeowners—on Chicago’s South and West sides seeking funds for repairs amid limited access to traditional financing or city repair programs. According to Ann Lui of Future Firm architecture practice: “Mark Diamond took advantage of the fact that disinvested neighborhoods have challenges around home repair…many programs that used to support low-income people in getting those home repairs have kind of evaporated over time.”
A federal judge barred Diamond from closing loans directly as early as November 2003; he then used agents and associates—including Cynthia Wallace—to continue his operations targeting elderly homeowners.
Regulatory actions followed: The Illinois Department of Financial and Professional Regulation revoked Diamond’s loan originator license in 2010 after investigating his involvement in mortgage fraud schemes but saw its decision reversed by a Cook County judge.
Diamond involved several others—including Matthew Fefferman (Harbor Financial), Forrest Fawcett (Able Title Company), and Gary Thomas Bohn—in processing fraudulent loans or appraisals; all became co-defendants.
In Dunn’s case specifically, repairs promised were never completed despite being billed nearly $30,000; instead she ended up with an outstanding reverse mortgage when she died.
“I would have loved to have held on to that house, but it just wasn’t in the cards,” McConnell said about selling her mother’s deteriorating property.
Sorensen called for greater responsibility among lenders issuing reverse mortgages: They should ensure borrowers understand contract terms and recognize risks faced by vulnerable seniors misled about such agreements’ consequences.
“These people were duped into entering into reverse mortgages that they thought were all above board. And in many instances, it was years before the original homeowners or their family members discovered the fraud,” Sorensen said.
Yet current laws often favor lenders over defrauded families.
Kerwin Cockrell experienced similar losses after being persuaded by Diamond into transferring his Humboldt Park family home’s deed as part of another reverse mortgage arrangement—with repairs never made and no funds received from proceeds. After defaulting on requirements following his brother’s death—and not understanding communications from American Advisors Group—the property went into foreclosure despite legal challenges reaching Illinois Appellate Court level.
Although Eloise did not believe that the [American Advisory Group] documents pertained to her, she did understand that they referenced the mortgage, and she should have sought more information rather than ignore them,” stated an appellate ruling denying further appeal at state Supreme Court level.
Other participants received sentences ranging from 18 months (Bohn) up to 42 months (Wallace); Fawcett awaits sentencing next year according court records reviewed by Block Club Chicago.
Cockrell now lives with his son after losing his childhood home—a loss he says erased hopes of passing down family legacy via trust arrangements—but expressed approval for criminal sentences imposed: “I thank the Lord that he blessed me with good children.”
