Illinois Mortgage Law

Illinois Mortgage Law thumbnail
Find out what you need to know about Illinois mortgages.

Mortgage laws in Illinois are similar to mortgage laws in most other states, although Illinois also provides for specific laws against predatory lending and for assisting homeowners undergoing foreclosure. In fact, the Illinois Mortgage Foreclosure Law protects homeowners facing financial situations that make them unable to make their mortgage payments.

  1. Facts

    • The attorney general of Illinois offers potential home buyers and current homeowners with a detailed guide for taking out and paying on mortgages. Specifically, the attorney general recommends that home buyers keep a close eye on predatory lending practices that include excessive fees and inaccurately recorded income. In the latter case, some lenders will alter the income that the home buyer provides for the purpose of financing a larger loan. In addition, Illinois gives homeowners a variety of options before and even after foreclosure, including loan reinstatement, repayment plans and property redemption.

    Scam Prevention

    • Illinois law forbids what are known as "mortgage rescue" scams. In a mortgage rescue scam, a consultant will charge homeowners a fee to hold off foreclosure by claiming to work with the lender. In reality, the mortgage rescue consultant is unnecessary in the process of preventing foreclosure. As the attorney general's office notes, foreclosure prevention does not require a special consultant, as the homeowner can work directly with the lender or can hire a licensed real estate attorney or even a nonprofit counselor to do the same thing.

    Benefits

    • Illinois mortgage law aims to benefit the homeowner and the lender as much as possible. Foreclosure of a property is a last resort, for the homeowner and the lender: the former loses his home, while the latter must deal with a financial loss in the property. As a result, the Illinois Mortgage Foreclosure law encourages lenders and homeowners to seek a loan modification or a suitable payment plan, and it offers homeowners the choice of "deed-in-lieu," in which homeowners can transfer the property to the lender and thus forgo any further financial obligation toward the property.

    Local Programs

    • The State of Illinois also offers a range of local mortgage assistance programs that homeowners can utilize where they live. The Neighborhood Housing Services (NHS) is available throughout the larger metropolitan areas, and the Fair Housing Legal Clinic provides pro bono or low-cost legal advice for homeowners experiencing mortgage difficulties. In addition, the Community Economic Development Association (CEDA) is available in a number of Illinois cities to assist homeowners preparing to purchase homes or facing default and/or foreclosure.

    Considerations

    • Illinois's mortgage laws create a system in which homeowners and lenders are treated as fairly as possible. In addition, the various pre-purchase counseling programs ensure that home buyers have all of the information that they need. The final decision about whether a property is affordable is up to the buyer. As a result, the Illinois Attorney General's Office encourages all potential home buyers and even those facing foreclosure--to consider their options very carefully before making a decision.

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References

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