Madigan to launch probe into mortgage practices

October 12, 2010 3:28:47 PM PDT
Illinois Attorney General Lisa Madigan and attorneys general from across the nation are expected to launch an investigation Wednesday into mortgage practices.

It's a move to get mortgage lenders to re-write troubled loans and keep homeowners out of foreclosure.

Attorney General Madigan is demanding 23 mortgage service prove fairness and accuracy of their foreclosure process. This follows three banks suspending their foreclosure or evictions while they investigate the accuracy of their process.

The investigations come as homeowners are struggling to stay in their homes.

On the 28th floor of the Daley Center you hear similar stories about homeowners trying to fight foreclosure. ABC7 found some homeowners most troubled that their lenders are not helping them modify their mortgages.

Homeowner Mark Hein says he applied for two modifications with his lender. Both were declined.

"They were given the money and were told to deal with people and help them out. They're not doing any of that. I'm not the only one here. The courtroom was packed with people," said Hein.

Madigan is teaming up with attorneys general across the country to force banks to follow to law and to help homeowners.

"Every home that ends up in foreclosure decreases the value of the homes around them. It erodes our tax base, so the burdens are enormous in Chicago and throughout this country," said Madigan.

Madigan will also file legislation during the veto session that requires lenders to provide additional information to the homeowner in foreclosure; for instance, what institution owns loan, how much is owed and the terms of the original mortgage contract.

"We have to make sure that accurate information is being provided to the homeowner so they can hopefully understand the situation, if there is a way out of it into a modification. It benefits them and the whole community," said Madigan. While state officials work to protect homeowners' rights, Elma Jean has been working to save her son's home. Jean says his work was cut back and she and her husband cosigned the loan. She says they've been trying to modify his loan for a year.

"You have to have some faith, a lot of faith in God to keep up and say I will not give up. I'm going to do the best I can and one day it will be resolved. That's what we live, by our faith," said Jean.

Madigan is on the executive committee and says she expects the task force to tackle holding lenders to the law and finding ways to force lenders to make modifications. She is expected to tell the public more about the multi state task force Tuesday.


Load Comments