UPDATED 11/4/10 – 10:48 a.m.
CHICAGO (STMW/WBBM) – A bank claiming U.S. Rep. Bobby Rush failed to pay property taxes filed a lawsuit Wednesday against the South Side Congressman and his wife Tuesday, seeking repayment of more than $500,000 in second mortgages on two homes.
A statement from the congressman on Thursday denied the allegations in the suit, saying the mortgages are current and he was not aware of any property tax problems.
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New City Bank claims that on Dec. 30, 2005, it issued a $345,000 second mortgage to Rush and his wife, Carolyn A. Rush, for property in the 3500 block of South Calumet Avenue, and a $228,000 second mortgage for a property in Buchanan, Mich., according to a suit filed in Cook County Circuit Court.
The suit also claims New City Bank extended a $30,000 Home Equity Line of Credit Agreement and Disclosure to Rush and his wife on the Chicago property in July 2008, and increased the line of credit to $45,000 in July 2009.
The unpaid real estate taxes on the Chicago property are for no less than $2,172.01, while the taxes on the Michigan property are for at least $11,466.68, the suit claims. The Michigan condo, about 25 miles from Lake Michigan, is in a private, gated community.
Rush’s statement indicated, “the facts as presented by the Sun-Times are puzzling” but that “the mortgages on both properties are totally current and that whatever the case may be with the property taxes the congressman was not aware of any dire situation by Cook County. He will get to the bottom of this matter at the start of business [Thursday].
“Unlike many Americans who cannot pay their mortgages the congressman’s payments are current and up-to-date,” the statement reads.
In December 2005, Washington Mutual bank failed a pair of foreclosure suits against Rush. However, the situation was resolved a few days later when Rush came up with the money. The latest suit indicates Rush satisfied Washington Mutual by taking out the loan with New City Bank.
But New City Bank claims the mortgages require Rush and his wife to pay any taxes or insurance on the property, and the bank can order the entire debt repaid if the taxes or insurance is not paid. The suit claims they failed to pay their real estate taxes for 2009.
It also claims New City Bank made repeated requests for them to pay the taxes and interest, but they have failed to do so. On Oct. 14, the bank exercised its right to accelerate the payments of the entire debt but Rush and his wife have not paid, according to the suit.
“This is the first time the Congressman has heard of this matter having been informed of this by the Chicago Sun-Times … Neither he nor his attorney has been served with legal documents of any kind as it pertains to New City Bank and his properties,” Rush’s statement says.
The bank is seeking $341,357.06 for the Chicago property, plus legal fees and $67.52 interest per day and $227.632.67 for the Michigan property, plus legal fees and $45.11 interest per day.
It is also seeking to recover $37.507.51 for the HELOC on the Chicago property, plus $5.12 interest per day.
Rush’s statement said the suit, “highlights the escalating problem that millions of Americans face everyday — the callous and often times extreme, non-negotiable practices of some banks that have contributed to millions of families in Chicago and the nation losing their homes.
“This story comes at a time when federal agencies are investigating banks’ foreclosure-documentation process after some financial institutions indicated they would suspend or review foreclosures because of unethical practices,” the statement says.
Records show Rush took out both mortgages, totaling about $550,000, in September 2001.
(Source: Sun-Times Media Wire © Chicago Sun-Times 2010. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. WBBM contributed to this report.)