New homes in Chicago are often financed through Chicago mortgages. Some areas of Chicago have extremely high rates of default and foreclosure on these Chicago mortgages. The State of Illinois is blaming this situation squarely on Chicago mortgage brokers who engage in predatory lending practices.
Now, they are attempting to do something about it. Starting January 1, a new law required that people looking to buy new homes in Chicago’s most vulnerable areas will need to submit all financial records to the state. Some will be further singled out for mandatory credit counseling before they will be able to purchase new homes in Chicago. The law will only affect mortgage brokers, not banks and credit unions.
Proponents of the measure hope it will put a damper on predatory lending. Opponents worry that it will slow down the process of buying new homes in Chicago, and put a damper on the booming Chicago real estate market.
