Apr 5, 2009 5:06 pm US/Central
Gov. Pat Quinn Signs Foreclosure Grace Period Bill
CHICAGO (CBS) ―
Illinois homeowners facing foreclosure are getting some help from the state. They've been given some extra time to work with lenders to try and save their homes.
CBS 2's Mike Puccinelli reports on the details of the state's new foreclosure law.
Illinois Governor Pat Quinn signed a bill into law that rewrites the rules for lenders planning to foreclose on cash strapped homeowners. It was passed by the state legislature in January and Quinn signed it early Sunday afternoon at a church on Chicago's southwest side.
State Senator Jacqueline Collins (D-16th) co-sponsored the legislation.
"It will establish a 90-day grace period for homeowners, for struggling homeowners if they decide or opt into seeking housing counseling," Collins said.
As part of the law from now on lenders are: barred from beginning foreclosure proceedings in the first 30 days; after that period lenders are required to notify homeowners that they have another 30 days to seek credit counseling before legal action can begin; and homeowners who sign up for counseling will have 30 more days to develop a loan payment plan.
Governor Quinn says it's important to do everything possible to keep people in their homes.
"This is a day that we are going to commit ourselves to straightening out a major problem in Illinois," Quinn said. "We believe in fighting hard for neighborhoods."
In Chicago Lawn there have been more than 700 home foreclosures and according to the Center for Responsible Lending in Illinois in 2009, more than 103,000 home foreclosures are projected.
Backers of the law say greed-driven lenders should take notice.
"Let the word go out to predatory lenders -- don't come back," said House speaker Mike Madigan.
And they say those that do come back, will be operating under an entirely different set of rules.
"The lending entities need to become more respectful of us, than their investments," said Jeff Bartow of the Southwest Organizing Project.
Backers say the legislation passed Sunday is one way of demanding that respect.
In the Southwest side area, where the news conference was held, more than 8,500 homes have gone into foreclosure since 2007.
Activists say that affects entire neighborhoods by depressing home values and shrinking the property tax base. It also leaves many boarded up homes which are attractive to criminals.
The Associated Press contributed to this report.
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