Can the Illinois Homeowner Protection Act help you?
The Homeowners Protection Act (HPA) is meant to help Illinois homeowners who are at least 30 days behind on their mortgage payments. Regardless of the homeowner’s income or the size of the loan, the law places certain requirements on lenders:
1) Lenders must notify homeowners in writing when the loan is more than thirty days past due.
2) Lenders must provide an opportunity for the homeowner to obtain housing counseling within 30 days. If a homeowner chooses to get counseling, he can contact any U.S. Housing and Urban Development (HUD) certified counseling agency.
3) In their written notice, lenders must clearly state that if the homeowner seeks housing counseling, the homeowner will receive an additional 30 day grace period.
4) Lenders cannot start foreclosure proceedings until they have provided this notice and allowed the counseling and grace periods, if applicable, to pass.
If you are in a situation where foreclosure on your home was initiated prior to April 9, 2009 (when the HPA was signed), it is too late for the protections of the HPA. Additionally, the law only applies to each loan once; if you default on a loan the first time, the HPA will apply. If you are able to work out a payment plan with the lender and default again, the HPA will not apply, and you will receive not further grace periods under the HPA. If the loan is not on your principal place of residence, it does not qualify under the HPA. Moreover, if you have applied for bankruptcy, the HPA will not apply.
Assuming you otherwise qualify for the protections of the HPA, keep in mind that this law will expire on April 8, 2011.
Is this program only applicable for Illinois homeowners?
Yes, this post is about the Illinois Homeowner Protection Act, which only applies to homeowners in Illinois. However, your state may have a similar act, and there may also be some federal laws that apply to you.