call for foreclosure protection
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[October 30, 2008]
CHICAGO -- Standing with Ada Brown
at the home she almost lost to an unaffordable, adjustable-rate
mortgage, Gov. Rod R. Blagojevich today (Thursday) renewed his call
for legislation to help Illinois homeowners in jeopardy of
foreclosure. The legislation, which will be sponsored by state Sen.
Jacqueline Y. Collins, D-Chicago, and state Rep. Julie Hamos,
D-Evanston, will provide up to three months to work out new
mortgages for homeowners who enter counseling.
Blagojevich also announced today that despite recent reports of
mortgage delinquencies reaching all-time highs, many Illinois
homeowners are seeing an improvement in their own financial
situations due to the Homeowner's Assistance Initiative launched by
the governor in February. At the nine-month mark, low-cost,
fixed-rate loans amounting to approximately $1 billion have been
written to help more than 4,000 families keep their homes.
"Through the hard work of these lenders and the ongoing outreach
efforts of the Homeowner's Assistance Initiative, we've been able to
help families keep their homes. But we're not satisfied, and that's
why we are going one step further to help homeowners," Blagojevich
said. "I am pleased to be working with Sen. Collins and Rep. Hamos
to pass meaningful legislation to give homeowners time to rework
their mortgages to help them stay in their homes."
The national mortgage crisis has shown that many homeowners have
been victimized by changes in their mortgage terms, such as an
interest rate reset or penalties for late payments. Those homeowners
need additional time and professional assistance to renegotiate
The legislation, which will be introduced during the General
Assembly's November veto session, will establish moratoriums on
mortgage foreclosures for homeowners who enter mortgage counseling.
The legislation will require that lenders and loan servicers notify
homeowners who are delinquent on mortgage payments that they have 45
days to seek mortgage counseling services to get their loan back on
track. If a borrower enters counseling, they would get an additional
45 days in order to work out a payment plan or refinance option.
During this entire period of up to three months, the homeowner is
protected from foreclosure.
In February, the governor introduced legislation (Senate Bill
1998) that would have provided a 60-day moratorium for homeowners.
That bill passed the Senate but was stalled in a House committee.
This summer, the governor used his amendatory veto power to improve
Senate Bill 1879 to add the foreclosure moratorium language to the
bill. While the amendatory veto was overridden, Collins stepped
forward and committed to pushing a bill during veto session that
would provide even longer relief and stronger protections for
"Too many families are facing homelessness because they didn't
know where to find help when they first had trouble paying their
bills. This legislation gives families an opportunity to deal with
their financial situation before they are at risk of losing their
homes. I am pleased to work with Gov. Blagojevich on this crucial
legislation," said Collins.
"As a longtime consumer advocate, I am looking forward to working
with the governor and Sen. Collins to enact this important
legislation. The recent housing crisis has shown us that homeowners
need time to work with a counselor and their bank to avoid
foreclosure," said Hamos.
Earlier this year, the governor launched a comprehensive
Initiative to help families cope with changing conditions in
their mortgages. As part of that initiative, the governor created a
statewide network to counsel families at risk of losing their homes
through foreclosure. Since February, at least 3,500 families have
received counseling and mitigation assistance through the governor's
Homeowner Assistance Initiative and a national program extended to
Ada Brown, a homeowner in Chicago's Englewood community for 36
years, almost lost her home after she took out a loan to make
improvements to her kitchen and bathroom. She was unknowingly put
into an adjustable-rate mortgage that caused her to fall four months
behind on her rent when the interest rate skyrocketed. Ms. Brown
received mortgage counseling from Neighborhood Housing Services, an
organization that works with the governor's Homeowner Assistance
Initiative to counsel homeowners in jeopardy of losing their homes.
With counseling and a new fixed-rate mortgage, she was able keep her
home and save $300 a month.
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"I've lived in the Englewood community for over 30 years. I love
my home. It's where I take care of my disabled son and my
granddaughter. A while back, I needed some repairs done and somehow
got an adjustable-rate mortgage. I fell four months behind on my
payments. I was scared because I'm a senior on a fixed income. I
didn't want to lose my home," Brown said.
Through another part of Homeowner's Assistance Initiative,
Blagojevich announced the Homeowner Assistance Pool, a group of
Illinois mortgage lenders that would commit to provide new, low-cost
loans to families struggling to pay their current mortgages. Since
then, thousands of Illinois families have refinanced expensive,
adjustable mortgages into 30-year, fixed-rate mortgages with
interest rates of between 5.75 percent and 8 percent. The new loans
are guaranteed by the Federal Housing Administration, and
participating lenders agreed to limit loan fees to no more than
$1,000, with no prepayment penalties. Unlike similar programs in
other states, the Homeowner Assistance Pool has no maximum income
limits, is open to homeowners regardless of the terms of their
current mortgage and doesn't cost the state any money.
In order to qualify, borrowers must have a minimum credit score
of 580, which makes the program extremely inclusive. Approximately
90 percent of the population has credit scores of at least 580.
Families who don't meet the criteria may still be offered new loans,
but the terms may vary.
"We are pleased to join Gov. Blagojevich in his efforts to help
make sure hardworking families can afford to stay in their homes. We
look forward to participating in the Homeowner's Assistance
Initiative and to offering Illinois families safe mortgages with
fixed, affordable payments," said Howard Ackerman, senior vice
president of mortgage lending for Fifth Third Bank.
The Mortgage Fraud Task Force, which is housed in the Illinois
Department of Financial and Professional Regulation, has been an
active part of the Homeowner's Assistance Initiative. In 2008, it
has taken disciplinary action on more than 50 professional and
business licenses of mortgage lenders and loan originators.
Representatives of the task force work with the counseling network,
staff a consumer hot line, and have fielded hundreds of complaints
from customers and potential homebuyers.
More information about the governor's Homeowner Assistance
Initiative can be found at
[Text from file received from
Illinois Office of
Communication and Information]