The recently-announced revision of the infamous HB 4050 anti-predatory lending law, which would now apply to first-time homebuyers across Cook County rather than just specific zip codes, might seem like a more effective way to protect consumers, but a senior executive at ShoreBank Corporation says the legislation fails to address the most pressing problem.
“It doesn’t really help the person who is [already] facing a mortgage payment that they can no longer afford,” said Fran Grossman, executive vice president of ShoreBank, who earlier this month testified before a House subcommittee hearing on predatory loans. “I mean, we can look to the regulators and others to figure out how to prevent this from happening again. But we also really need to look at the federal governments and the state governments to figure out how we’re going to bail out.”
Grossman says federal and state programs should be put into place to offer forbearance to homeowners facing foreclosure, and reduce their monthly payments to an affordable level.
While ShoreBank is primarily concerned about the low-and-moderate income communities it services, Grossman says it’s important not to assume that people in these areas are somehow less intelligent than their counterparts in other neighborhoods. “The people who have been tricked into this, in a sense, are no different than the people who live in wealthy suburbs,” she said. “They don’t read the documents, they don’t understand, they’re very excited, and people are assuring them it’ll be OK.”