IL Launches Predatory Database Pilot

The governor of Illinois has signed into law a House bill, strongly opposed by the mortgage industry, to establish a predatory-lending database pilot program in Cook County.The database will be designed to receive and store specific loan-related information gathered from brokers, originators, credit counselors, title insurance companies, and closing agents. Within 10 days of taking a mortgage application, the originator will have to provide certain information to the database. The Department of Financial and Professional Regulation will have seven days to determine whether the borrower will be required to undergo mandatory HUD-certified credit counseling, with costs paid by the originator. Before the mortgage is closed, the title company must enter further information into the database, which will then create a certificate of compliance. Although Gov. Rod Blagojevich says the legislation will "save neighborhoods" by enabling homebuyers to make informed decisions, professionals such as Terry Bivins, president of the Illinois Association of Mortgage Brokers, says the bill is onerous and will hurt statewide operations. "The Division of Banks and Real Estate is turning the government into an underwriter," said Mr. Bivins. "They don't have enough employees to process the loans in the system now. It's unprecedented that the government is trying to make counseling mandatory and have the private sector pay for it."