Illinois takes steps to thwart predatory mortgage lenders

WHEATON—Illinois Attorney General Lisa Madigan last month accepted an $8.7 billion settlement on a lawsuit against Countrywide Financial Corp., charging the fifth largest mortgage lender and servicer in the nation, with undertaking predatory lending practices. Madigan led the charge, which was joined by California Attorney General Jerry Brown and nine other states.

According to Bob Palmer, executive director of the nonprofit advocate organization Housing Matters, the settlement demands a mandatory loan modification process. In Illinois, close to 11,000 borrowers are eligible for mortgage adjustments.  

The program “hopefully will serve as a model for other lenders and the federal government for how to help homeowners on the verge of foreclosure,” he said.

Almost 11,000 borrowers in Illinois are expected to be eligible for loan modifications. Specifically, adjustments are aimed at assisting primary home dwellers who received subprime loans or those who accepted Pay Option Adjustable Rate mortgages between January 2004 and December 2007.

Palmer added “hopefully (it) will serve as a model for other lenders and the federal government for how to help homeowners on the verge of foreclosure.

The program is anticipated to get underway by Dec. 1, 2008. For more information, visit the Countrywide Financial Web site at http:://www.countrywide.com or visit the Housing Matters Web site at: http://www.housingmatters.net.