Once Overlooked, Housing Program Provides Affordable Alternative
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Once Overlooked, Housing Program Provides Affordable Alternative

December 3, 2002

Industry Prevails in Illinois Courts MortgagePress.comIllinois Association of Mortgage Brokers, Office of Banks and Real Estate, High Cost Mortgage Rules, 7th Circuit Court of Appeals
On Oct. 21, the 7th Circuit Court of Appeals ruled in favor of
the Illinois Association of Mortgage
Brokers, remanding the case to the district court to determine
which parts of the Office of Banks and Real Estate (OBRE) High Cost
Mortgage Rules are preempted by the Alternative Mortgage Parity Act
of 1982.
IAMB had filed a lawsuit for declaratory judgment in a federal
district court on July 3, 2001, seeking clarification as to the
effect of certain high-cost mortgage rules enacted May 17, 2001 by
the Illinois OBRE. The rules appeared to apply to certain
alternative mortgage transactions such as balloon mortgages or
adjustable-rate mortgages which are governed by the Parity Act,
rather than state law. Illinois did not opt out of the Parity Act,
and the federal district court had ruled in favor of the Illinois
OBRE. IAMB filed an appeal with the 7th Circuit Court of Appeals
last fall.
IAMB is pleased with the appellate court ruling and plans to
work within the legislative and regulatory process to create
further consumer protections which do not restrict access to credit
via alternative loan programs, stated IAMB President Rob Hardman.
IAMB applauds the appellate court for recognizing the conflict
between federal law and state regulation that restricts consumers
loan choices, and is anxious to see the OBRE clarification of the
rules.
Since the enactment of the OBRE Rules in May of 2001, some
state-chartered lenders have limited loan programs available to
consumers due to uncertainty regarding this Illinois regulation.
The purpose of IAMBs suit was to end this uncertainty so that
state-chartered lenders could offer alternative mortgages to
consumersas allowed by federal law for federally-chartered lenders
without fear of regulatory action by the Illinois OBRE.

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