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Jonathan Greig/MEDILL

Homeowners now have added protection when dealing with lenders

New foreclosure rules aim to nip predatory lenders in the bud

by Jonathan Greig
Feb 27, 2013

Illinois homeowners, especially those in the throes of a foreclosure battle with lenders, can finally breathe a small sigh of relief now that the playing field has been leveled a bit more.

In an announcement Friday, the Illinois Supreme Court released a series of new rules aimed at cleaning up the foreclosure process and stopping many of the predatory lending practices that contributed to the recent housing market crash.

Chief Justice Thomas L. Kilbride, one of the first officials to push for the mortgage foreclosure mediation program, said, "These new rules will promote fairness in home foreclosure proceedings, curb abuses in the system, provide lenders finality when foreclosure is necessary, and ensure [that] homeowners who have been thrown out of work during the years of a troubled economy are aware of their rights and where to turn for help."

First suggested by Justice Mary Jane Theis, the Special Supreme Court Committee on Mortgage Foreclosures was created almost two years ago and, through public hearings and debate between committee members, created the new Supreme Court rules.

"We had input from private citizens, people who were going through foreclosures themselves, from banks and attorneys,” said Judge Lewis M. Nixon, chair of the committee and supervising judge of the Mortgage Foreclosure Section of the Cook County Circuit Court. “The rules are balanced. They contain recommendations that are helpful to both sides."

The rules provide statewide guidelines for lenders that force them to give homeowners all the necessary information about the seriousness of foreclosure and to make sure lenders exhaust all options, including and most important, loan modification, before foreclosing. Lenders now must give legal notices during each stage of the process and before the sale date of a foreclosed house.

"Some of the provisions in these rules are controversial in their specific worlds, whether it be finance and lending or in public interest and consumer law,” Theis said in a statement. “I applaud the Special Committee, and all those who had input, for drafting provisions that will lend some stability and certitude to what is a financially and emotionally draining process."

Many homeowners have railed against a system that they feel perpetually leaves them one step behind lenders procedurally and often in the dark about the legal process surrounding their homes.

“Many borrowers submit reams of paperwork trying to qualify, only to be told by the bank it's not the right kind of paperwork, and they have to start all over again,” said Emma Scott, a Chicago foreclosure lawyer. “Borrowers often submit all kinds of paperwork in good faith to try and qualify, and in the mean-time the bank is going forward with foreclosure.”.

The rules take effect March1.