Illinois Lawmakers Target Mortgage Fraud
CHICAGO - Illinois lawmakers have joined the growing list of lawmakers in states around the country who are getting tough on the people who commit mortgage fraud. Earlier this month, state lawmakers introduced a bill aimed at so-called "mortgage rescuers" - con artists who promise to bail out cash-strapped families but who really end up taking their homes instead. In a released statement, Attorney General Lisa Madigan said "low income neighborhoods are rife with swindlers promising to save your home." The Mortgage Rescue Fraud Prevention Act was drafted by Madigan and introduced by state Sen. Jacqueline Collins (D-Chicago). The measure requires consultants to provide homeowners with a written contract that concisely explains the services and gives the homeowner the right to cancel at any time before the services are actually performed. In addition, the bill provides for criminal penalties for violators of the act. It also contains additional provisions to address the most serious cases, when homeowners turn over title to their properties. The proposed law says the consultants must verify that the homeowner has the financial wherewithal to buy back the house. A homeowners who has given over title to their house under the agreement allowing them to buy it back would have the right to cancel that agreement at any time. If they canceled they would then regain the title and again be responsible for the outstanding mortgage debts. Lastly, the bill would prohibit the use in these cases of a quitclaim deed. Madigan said while those deeds can have a proper purpose in certain cases, "they have become a common tool used by forgers and property thieves." The bill was expected to be considered by the General Assembly in the spring session.