Starting 1 July 2008 every mortgage on property in Cook County will be required to to have a Certificate of Compliance or Certificate of Exemption attached to it in order to be recorded. The reason? The Anti-Predatory Lending Database Program.
In case of exemption the programs requirements will impose some additional administrative work on the title companies and lender and a small $50 on borrowers.
In the case of non-exempt mortgages, borrowers will be required to attend counseling.
The borrowers who will be required to attend counseling include first time homebuyers. It also includes any one borrowing money on a principal residence if the one of the following five conditions exist:
1. loan permits interest only payments;
2. loan allows negative amortization;
3. total points and fees are in excess of 5% of the loan amount;
4. loan includes a prepayment penalty; or
5. the loan is an adjustable rate loan with an initial period of 3 years or less.
The counseling requirement would have to be met prior to closing and thus could delay closing if not met.
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