Mortgage Law Makes Sales Slow

Chicago is the test lab for a new law being passed that, up front, will cap mortgage gauging in low to moderate-income areas. Mortgage professionals see the law as something else; a way to make it harder for lower income borrowers to buy a house. Since the law was put into action in August, the amount of home sales and new mortgage applications has dropped significantly in the areas affected. Neighboring areas have also seen a drop, but it was not as noticeable as the zip codes pointed out by the law.

The law requires that some borrowers in specific zip codes seek financial counseling prior to obtaining a mortgage. Financial advisors are saying that the law is working, with low credit borrowers gaining insight into the mortgage they are obtaining. Others are saying that the law is discriminatory from the beginning, and should not be allowed. Homeowners in the affected areas are required to take the classes even if they are refinancing their existing homes, causing some to question if the law is to protect the borrowers, or the lenders.