config

Collins’ plan protects, informs seniors seeking reverse mortgages

collins-reversemrgIn the wake of revelations that at least one con artist used a risky financial product called a reverse mortgage to scam dozens of senior citizens, State Senator Jacqueline Y. Collins (D-Chicago 16th) secured Senate passage today of legislation that would help protect consumers from such fraudulent schemes.

“A reverse mortgage is a complicated financial product that can leave homeowners and their families vulnerable to scams and unable to pay when the loan comes due,” Collins said. “This legislation requires lenders to provide potential borrowers with accurate information about the product, a list of counselors they can contact if they need help and the opportunity to reconsider within three days of signing the paperwork.”

 

For almost 30 years, a lawsuit filed by the state alleges, Chicago remodeler Mark Diamond tricked senior citizens into taking out reverse mortgages – which pay out cash advances based on a homeowner’s equity – and then use the loan proceeds to pay his company to make home improvements. Instead, Diamond took the money while the repairs remained unfinished or poorly done. Many of his victims and their families faced losing cherished homes they’d owned for decades when the homeowner died or moved into long-term care and the loan (the cash paid out, plus interest) came due. Attorney General Lisa Madigan is asking a court to put Diamond, who kept his scheme going by conducting it under the auspices of different companies, out of business for good. Diamond’s practices are also under federal investigation.

Collins worked with Madigan, Housing Action Illinois and other advocates on Senate Bill 1281, which would ensure potential borrowers are informed about the risks of reverse mortgages and also prohibit someone who facilitates a reverse mortgage from accepting any of the proceeds in exchange for services, as Diamond did. Finally, the legislation would prevent conflicts of interest by banning lenders from receiving compensation in exchange for trying to sell borrowers on other financial products, such as life insurance policies and investments.

“The senior citizens I represent take great pride in their homes; many have worked hard their whole lives to pay off their mortgages,” Collins said. “Strong consumer protections can help them avoid unscrupulous schemes so they can live out their later years in peace and dignity and not worry about whether the family home will be there for their children and grandchildren.”

Next, the House will consider Collins’ legislation.

Sign up for The Majority Report HERE

Follow ILSenDems

Facebook Instagram Twitter YouTube

News Releases

IMAGE Murphy pushes to increase lobbying transparency in Springfield
Thursday, 05 December 2019
SPRINGFIELD – Lobbyists are now required to disclose more information regarding their clients and relationships to local government units under new...

Read More...
IMAGE Harris assists Will County residents with winter clothing drive
Wednesday, 27 November 2019
SPRINGFIELD – State Senator Napoleon Harris III (D-Chicago) will help Will County residents stay warm during the winter by partnering with fellow...

Read More...
IMAGE Koehler: We need to prioritize good-paying jobs
Tuesday, 26 November 2019
SPRINGFIELD – Yesterday, Gov. JB Pritzker vetoed House Bill 3902, which would reinstate Illinois’ sales tax exemption for aircraft materials,...

Read More...
IMAGE Castro named to joint ethics commission
Tuesday, 19 November 2019
SPRINGFIELD – Just days after passing a resolution through the Senate creating it, State Senator Cristina Castro (D-Elgin) was named to the Joint...

Read More...
IMAGE Martwick fights for ethics reforms in Springfield
Tuesday, 19 November 2019
SPRINGFIELD – Moving quickly to enact ethics reforms in Springfield, State Senator Robert Martwick (D-Chicago) lent his support to two measures...

Read More...