Industry News

New Illinois law targets mortgage ‘rescue’ fraud

Protects homeowners from foreclosure scams

Illinois Gov. Rod Blagojevich Thursday signed into law a bill designed to protect homeowners from mortgage fraud, media reports said. The law, which takes effect in January, requires written details of services from mortgage bailout firms and gives homeowners more flexibility if they want to cancel an agreement, according to reports. "It's bad enough when homeowners are at risk of foreclosure," Blagojevich told the Chicago Tribune. "But it's a nightmare when the very same companies they hired to help them save their home end up cheating them out of their most valuable asset." Mortgage rescue fraud generally involves deals where an owner deeds a house to an investor for a year or some other period of time, supposedly allowing time for owners to get out of debt and purchase the home back with a new mortgage. All too often, though, the owners give up titles to their homes and never get them back. Under the new law, if a homeowner gives up the title to a home under a buy-back agreement, t...