Reverse Mortgage Companies in Illinois
Reverse mortgage companies in Illinois will soon be required to abide by the new laws governing Home Equity Conversion Mortgages (HECMs) of the state, beginning January 1, 2016. In August 2015, Governor of Illinois, Bruce Rauner had signed into law the Reverse Mortgage Act, after it was passed in the Illinois General Assembly.
This new legislation makes a significant change in the reverse mortgage law of the state, while consolidating duplicative and conflicting state laws regarding these loans. In fact with this new law in force there are series provisions of protections for borrowers. The most important feature of this new law is the implementation of a three-day “cooling-off” period post all the formalities have been completed. During this time period a prospective borrower cannot be required to close or proceed with the loan.
This new act was introduced to ensure that the seniors who are planning to take a reverse mortgage are better educated about their responsibilities as a borrower, while they are also being protected against predatory lending practices which may take advantage of their ignorance.
As per the provision of the new law, Office of the Attorney General of Illinois can develop the content and format of educational documents to equip the consumer with information regarding reverse mortgages, including potential alternatives to these loans.
So, at the time of making a written commitment reverse mortgage companies in Illinois working in the state will be required under the new law to provide prospective borrowers with a document in at least 12-point font that contains a disclosure of the three-day cooling period.
In addition to this the Act states that no reverse mortgage commitment will be made unless reverse mortgage companies in Illinois involved in brokering and making the reverse mortgage certify, in writing, that the person seeking the loan has received from the lender the educational document prepared by the Office of the Attorney General, along with information regarding the cooling-off period.