Foreclosure Lenders And Rescuers Harassing Illinois House Owners

September 10th, 2007 | Tags: Foreclosure Lenders

Illinois has not been spared the ignominy of foreclosures. Following on its heels have bobbed up so-called rescue companies causing sufferers to fall from the frying pan into the fire.

The rescuers parade themselves as consultants promising to do the negotiating and liaison work for a fee. The desperate house owners groping at any straw realize too late that they have been taken for a ride.

Another line of approach is more dangerous. Smart talk convinces the borrower to sign over the title deed on the plea that the borrower would continue to reside as tenants until they regain their financial balance. Then they will have the option of repurchasing their house. Too late the ex-owner finds out that the rent is even higher than the mortgage dues. There remained no possibility of buying back the property. The scammers now resell the house and the tenants cum ex-owners find themselves thrown out under the open sky.

The government is now up in arms against these ‘new predatory lenders’. A Senate Bill known as the Mortgage Rescue Fraud Act has been enforced from 1^st January 2007. All mortgage rescue groups have to submit disclosures and allow house owners the right to cancel agreements. 82% of the value of the house will have to be provided to the ex-owner in the case of the latter being unable to repurchase the unit.

Together with Illinois, Chicago too is coming forward with assistance. The president of the Federal Reserve Bank initiated the formation of a group known as Home Ownership Preservation Initiative or HOPI. There are no fees as it is sponsored by the city of Chicago and interested foreclosure lenders. Sufferers can avail of a one-hour phone advising service regarding contacting lenders and negotiating new terms. Moreover advice is also given about balancing individual incomes with budget to meet the emergency. The victims are acquainted with various other types of low interest loans to tide over for this critical period.

The prime aim is to stop future foreclosures. Accordingly Illinois has passed a Bill, which became the law on 1^st January 2006. Unfortunately it has been suspended. The focus was on certain minority concentrated foreclosure pockets. Certain rules had been laid down regarding interest-only clause, ARM for 3 years or less, non-verification of income, prepayment penalties etc. It was criticized for negatively affecting the housing market and of being discriminatory.

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