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Anti-predatory-lending law may be hurting home sales in Chicago

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A Chicago mortgage planner says home sales are down 45 percent in 10 ZIP codes where Illinois lawmakers now require mortgage brokers to refer borrowers with low credit scores for counseling. Although September home sales also declined in surrounding ZIP codes, they did not fall as much, according to an analysis of MLS data by Chicago-based mortgage planner Dan Green of Mobium Mortgage. The four-year Predatory Lending Database Pilot Program, commonly referred to as HB 4050 after the state legislation that created it, took effect Sept. 1. Intended to reduce predatory lending, the program is targeted at neighborhoods with above-average foreclosure rates. But critics have said it will make it harder for residents in the predominantly minority communities to obtain loans. Although federally chartered banks are exempt from the program, Green claims that as many as 30 lenders have stopped offering loans in the affected ZIP codes. He says confusion and delays connected with the counseling r...