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New laws target mortgage fraudBy Maura PossleyTribune staff reporterPublished June 2, 2006
SPRINGFIELD -- Gov. Rod Blagojevich Thursday signed into law a bill designed to protect homeowners from mortgage fraud.
The law, which takes effect in January, requires written details of services from mortgage bailout firms and gives homeowners more flexibility if they want to cancel an agreement.
"It's bad enough when homeowners are at risk of foreclosure," Blagojevich said. "But it's a nightmare when the very same companies they hired to help them save their home end up cheating them out of their most valuable asset."
Bailout deals--many of which have been linked to scams--require an owner to deed a house to an investor for a year, supposedly allowing time for owners to get out of debt and purchase the home back with a new mortgage. A Tribune series on mortgage fraud last year found instances in which owners gave up titles to their homes and never got them back as they expected.
Under the new law, if a homeowner gives up the title to a home under a buy-back agreement, the owner will be able to cancel the agreement up to five days after it was signed. Once the agreement is canceled, the owner will regain the title and any mortgage debt carried before the agreement.
Rescue firms also must pay the homeowner at least 82 percent of the fair market value of the property if the homeowner is eventually unable to buy back a home.
The governor also signed into law two other bills that further protect homeowners. One requires any deed or other property transfer to be notarized. The other instructs the Cook County recorder of deeds to notify homeowners if a quitclaim deed is filed that would transfer property without the knowledge of the owner. Both laws take effect in January.
"Mortgage rescue fraud has become a new favorite of predatory lending con artists," Illinois Atty. Gen. Lisa Madigan said. "We must act to stop the spread of this scam that is eating away at our neighborhoods."----------mmpossley@tribune.com
Copyright © 2006, Chicago Tribune
New laws target mortgage fraudBy Maura PossleyTribune staff reporterPublished June 2, 2006
SPRINGFIELD -- Gov. Rod Blagojevich Thursday signed into law a bill designed to protect homeowners from mortgage fraud.
The law, which takes effect in January, requires written details of services from mortgage bailout firms and gives homeowners more flexibility if they want to cancel an agreement.
"It's bad enough when homeowners are at risk of foreclosure," Blagojevich said. "But it's a nightmare when the very same companies they hired to help them save their home end up cheating them out of their most valuable asset."
Bailout deals--many of which have been linked to scams--require an owner to deed a house to an investor for a year, supposedly allowing time for owners to get out of debt and purchase the home back with a new mortgage. A Tribune series on mortgage fraud last year found instances in which owners gave up titles to their homes and never got them back as they expected.
Under the new law, if a homeowner gives up the title to a home under a buy-back agreement, the owner will be able to cancel the agreement up to five days after it was signed. Once the agreement is canceled, the owner will regain the title and any mortgage debt carried before the agreement.
Rescue firms also must pay the homeowner at least 82 percent of the fair market value of the property if the homeowner is eventually unable to buy back a home.
The governor also signed into law two other bills that further protect homeowners. One requires any deed or other property transfer to be notarized. The other instructs the Cook County recorder of deeds to notify homeowners if a quitclaim deed is filed that would transfer property without the knowledge of the owner. Both laws take effect in January.
"Mortgage rescue fraud has become a new favorite of predatory lending con artists," Illinois Atty. Gen. Lisa Madigan said. "We must act to stop the spread of this scam that is eating away at our neighborhoods."----------mmpossley@tribune.com
Copyright © 2006, Chicago Tribune
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