Is the Mortgage Rescue Fraud Act of Illinois licensing and rules information concerning Distressed Property Consultant of Mortgage Foreclosure Consultants? Does this act legalized Distressed Property Consultants (Mortgage Foreclosure Consultants) without the need for a license in law or a license at all?
Real Estate Attorney
If your question is whether you can be a consultant without any kind of license, the answer is practically speaking, no. Of the listed services I can not think of one that does not require some kind of licensing if you are acting in an agency capacity for an owner or buyer. So in a way your question does not contain enough facts: you would have to describe specifically what kind of service you might like to offer to determine whether or not it is covered. Worse yet there are so many pitfalls: clients can rescind contracts virtually anytime before all services are fully performed, compensation is limited and if you step over the line can be held criminally liable. About the only way you can act as a consultant without running the risks stated in the act is to fall into one of the various exemptions.
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Actually, it does precisely the opposite. The point of the act is to protect residential property owners who are at risk of losing their homes because of foreclosure or nonpayment of taxes from the potentially unscrupulous behavior of "distressed property purchasers" and "distressed property consultants." 765 ILCS 940/5. It places a LOT of restrictions on the practices of anyone consulting people in these situations, for example collecting or demanding any fee until all of the consultant’s promised services are fully performed; Collecting or demanding any fee that exceeds 2 monthly mortgage payments OR the most recent tax installment on the property, whichever is less; Personally or through a subsidiary or affiliate, taking any sort of lien or other security interest in the property; Taking any compensation from a third party unless it is first fully disclosed to the homeowner; Taking any power of attorney from the homeowner for any purpose, as well as other restrictions.
There are even criminal liabilities for violationg the act.
It should be noted that the law does explicitly exempt certain people, such as a HUD agent or a licensed attorney engaged in the practice of law.
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