Tuesday, November 06, 2007

Governor signs new mortgage counseling law...

This replaces the controversial HB 4050 which was to impact only a small segment of the South Side of Chicago. Here's part of the Trib.'s story:

The new law has some requirements that affect all of Illinois; others apply only in Cook County.

The statewide provisions take effect June 1 and require mortgage brokers to verify that borrowers can afford the full costs of a loan, including principal, interest and taxes, according to the governor's office.

All brokers in Illinois also must fully disclose material facts about the loans, such as how much the broker will be paid, and it limits some prepayment penalties....

Starting July 1, it will require counseling for first-time buyers and refinancers in Cook who obtain an interest-only loan; loans with negative amortization, causing the principal to increase; loans with points and fees that total more than 5 percent of the loan amount; loans with a prepayment penalty; or an adjustable-rate mortgage of three years or less.

Can you say overkill!


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