Home Ownership and Rental Issues
A safe, comfortable and affordable home is a basic need. If acquiring or maintaining appropriate housing becomes difficult, there may be ways the Office of the Attorney General can help. We have the authority to uphold many of the laws specifically designed to promote fairness in home financing, protect owners in housing-related transactions, and prevent home repair scams. While the Attorney General cannot act as an individual attorney, the office has developed a range of materials on homeownership and housing matters.
Illinois residents can also call the Homeowner Helpline at 866-544-7151 or assistance.
Preparing to Finance Your Home
Applying for a MortgageObtaining a mortgage is likely one of the most significant financial decisions you will make in your lifetime. Asking the right questions before you choose a loan can mean the difference between obtaining a loan you can afford and losing your home to foreclosure. Reviewing the materials below will help you to know the right questions to ask.
Learning About Contract SalesAn installment sales contract (often called a “rent-to-own” contract or a “contract for deed”) is one way move toward eventual home ownership. However, making payments over time without having legal ownership could leave a consumer in a vulnerable financial condition. The Installment Sales Contract Act is a law that details the responsibilities of the seller and the rights of the buyer. The seller must give buyers this Important Notice to Buyers and a copy of the sales contract at least 3 business days before the closing. By law it must also be made available on the Attorney General’s website.
Maintaining or Modifying Your Mortgage
Mortgage ForeclosureIf you are behind in your mortgage payments, there are steps you can take to prevent foreclosure. You may also contact the Attorney General's Homeowner Helpline at 866-544-7151 to learn more about your options or to report a predatory mortgage lender.
The Homeowner's Rights Act (Public Act 095-0961) requires lenders to provide borrowers with a clear notice of their legal rights and options when they are served with a foreclosure suit. The Homeowner Notice (sample text linked below) must advise homeowners that they can sell their home, refinance or pay off the loan during the redemption period. It will also advise homeowners to call their mortgage company to discuss alternatives to foreclosure.
The law also requires lenders to provide borrowers with an accurate statement of the outstanding mortgage balance within 10 days of the borrower's request. By telling homeowners exactly how much they must pay to avoid foreclosure, these payoff statements permit homeowners to quickly explore their options, such as refinancing the loan or selling their home to protect their equity.
Facing foreclosure can be unsettling and the worry can make homeowners vulnerable to scammers who try to take advantage of the situation. These resources can help you understand your rights and how to protect your home and finances.
Home Equity Loan and HELOC – Home Equity Line of Credit
As you proceed with your mortgage, making payments overtime, you ideally develop equity. Equity is the difference between what you owe on your mortgage and the current value of your home or how much money you could get for your home if you sold it.
Taking out a home equity loan or getting a home equity line of credit (HELOC) are common ways people use the equity in their home to borrow money. If you do this, you’re using your home as collateral to borrow money. This means if you don’t repay the outstanding balance, the lender can take your home as payment for your debt.
As with other mortgages, you’ll pay interest and fees on a home equity loan or HELOC. Whether you choose a home equity loan or a HELOC, the amount you can borrow and your interest rate will depend on several things, including your income, your credit history, and the market value of your home.
Talk to an attorney, financial advisor, or someone else you trust before you make any decisions and gather information to understand your options.
Reverse Mortgages
A Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage, is a special type of home loan only for homeowners who are 62 and older. Unlike a traditional mortgage, with a reverse mortgage loan borrowers don’t make monthly mortgage payments. The loan is repaid when the borrower no longer lives in the home.
Before deciding whether a reverse mortgage makes sense for you, it's important to fully understand the terms of the loan and what other options you might have. While reverse mortgages can be an invaluable resource to help older homeowners access the equity in their homes, they are not for everyone. As the popularity of reverse mortgages grows, so does the potential misuse of the product. When selecting a reverse mortgage lender, you should feel comfortable that your lender representative is working for you and that you are getting the best deal possible.
Avoiding Scams Related to Home Ownership
Title Scams
If you have a mortgage-related complaint, please submit a complaint to the Attorney General’s office.
If you believe you've been a victim of a fraud or a scam, please submit a complaint to the Attorney General's office:
Upholding the Rights of Landlords and Tenants
Individuals who rent their homes and the property owners who hold the lease also have rights and responsibilities. For rental properties there are many federal, state and municipal laws that come into play, depending many factors, such as where you live or if you are participating in a federal program. While the Attorney General’s Office does not have authority in most rental housing matters, we do provide an overview of the rights and laws for tenants and landlords. Renters who need further legal information or support should retain an attorney or seek assistance from local agencies.